Don’t pay to get an Employer Identification Number

I’ve written earlier columns about consumers and businesses being tricked into paying fees for government documents or services they can get for free or at a much lower cost from a government agency directly. They include consumers wanting to renew their passport and landing on a website they think is the government’s, only to find out later that they paid an unnecessary fee to a private company. And businesses, including in Tennessee, getting notices that they need to pay a fee in the hundreds of dollars for a document they can get for $20 from their Secretary of State or other state agency.

In April, the FTC sent letters to multiple operators of websites that sell Employer Identification Number (EIN) filing and delivery services warning them that the FTC Act and the FTC Impersonation Rule prohibit posing as or misrepresenting an affiliation with a government agency. They charge consumers and prospective business owners up to $300 for an EIN that can be obtained for free from the IRS’ website.

EINs are corporate identifiers similar to a Social Security Number that are needed for such purposes as opening a business; opening the estate of a deceased loved one or family member; starting a non-profit organization; and hiring a household employee, such as a nanny. Consumers who landed on the website of one of the companies complained that they implied an affiliation with the IRS by:

• using seals, logos, imagery, layouts, formatting, colors, and fonts similar to the IRS on their websites and in ads that lead to their websites;
• using the acronym “IRS” in their domain names;
• prominently displaying the terms “IRS” or “EIN Assistant” (the name the IRS uses for its free EIN application tool);
• failing to clearly and conspicuously disclose that their websites are not the IRS’s site nor a government website; and
• not adequately disclosing their charges are entirely service fees because there is no IRS fee for an EIN.

The warning letters don’t suggest any individual recipient has broken the law, but it’s safe to say the IRS wouldn’t send them if it didn’t think there was a problem. It advises the companies to “conduct a comprehensive review of your marketing and advertising practices – including paid or other online ads, as well as representations made on your websites, on social media, in other promotional materials and communications, and through third-party distributors, marketing affiliates, and sales agents – to ensure that you are not engaging in deceptive or unfair conduct.”

The IRS and BBB offer these tips for people who need to get an EIN:

• Go directly to the IRS website at irs.gov to get an EIN for free using the IRS’s online tool. Don’t pay to get your EIN.
• Do your research. Check companies out at bbb.org and search online for their name and the words “review,” “complaint,” or “scam.”
• Report imposters to the FTC. If you see someone posing as the IRS – or any other government entity or business – report it at ReportFraud.ftc.gov.

We also encourage you to report it to our BBB Scam Tracker service whether or not you actually lose money. The website is https://www.bbb.org/scamtracker.