Fake Tax Registration & Compliance Scam in the United States
Scammers exploit US business owners' unfamiliarity with EIN registration, state annual reports, and IRS correspondence to charge fake compliance fees.
Part of: Fake Tax Registration / Compliance Scam
Last reviewed: 5 July 2026
New business owners in the United States face real filing obligations: states genuinely require annual reports, and the IRS really does send letters, so an official-looking compliance notice does not immediately read as fraud. Scammers exploit that patchwork, mailing letters that mimic government letterhead, cite real terms like Employer Identification Number, and attach urgent due dates for a fee routed to a private company. Some escalate to calls impersonating the IRS and threatening liens. The distinction that matters: an EIN costs nothing, and every genuine fee goes directly to the IRS or your state, never to a third-party compliance processor.
How this scam works on the United States
A new business owner in the US receives an official-looking letter or email claiming their company must pay a fee to 'complete' its EIN registration, file a mandatory 'Corporate Compliance' document, or resolve an urgent IRS matter, often referencing real terms like 'Employer Identification Number' or a state's actual annual report requirement to sound legitimate. The letter may closely mimic government letterhead and include a due date designed to create urgency, directing payment to a private company rather than the IRS or the state's Secretary of State office.
Because obtaining an EIN from the IRS is actually free, and state annual report fees are typically small and paid directly to the state, the inflated fees these scam letters demand (sometimes $100 or more) exploit the fact that many first-time business owners don't yet know the real process or its real cost. Some versions escalate to a phone call impersonating the IRS itself, threatening liens or legal action to pressure quick payment.
Common red flags
- A letter or email demanding payment to 'complete' EIN registration (the IRS provides EINs for free)
- Compliance fees far above your state's actual annual report or franchise tax fee
- Payment directed to a private company name rather than the IRS or your Secretary of State
- Urgent deadlines and threats of fines or business dissolution
- Letterhead that closely mimics a government agency without being an exact match
- Phone calls claiming to be the IRS that demand immediate payment by wire or gift card
How to protect yourself
- Remember that obtaining an EIN directly from the IRS at irs.gov is completely free
- Check your actual state annual report fee and deadline directly on your Secretary of State's official website
- Never pay a compliance fee based solely on a letter; verify with the actual government agency first
- Know that the IRS initiates most contact by mail, not by phone, and never demands payment via gift card or wire
- Keep your business registration renewal dates in a calendar so you're not caught off guard by fake urgency
- Consult an accountant or business attorney if you're unsure whether a notice is legitimate
How to report it
- Report suspected IRS impersonation to the Treasury Inspector General for Tax Administration (TIGTA) at tigta.gov
- File a complaint with the FTC at reportfraud.ftc.gov
- Report to your state Attorney General's consumer protection division
- Forward suspicious letters to your state's Secretary of State office for verification
Frequently asked questions
How do I know if a letter is really from the IRS versus an impersonator?
The IRS generally initiates contact by mail rather than phone or email, does not demand immediate payment by gift card, wire transfer, or cryptocurrency, and provides ways to verify notices directly through irs.gov. If a letter pressures immediate payment through unusual methods, treat it as highly suspicious regardless of how official it looks.
Do all US states require an annual report or franchise tax filing for a small business?
Requirements vary significantly by state — some require annual reports with modest fees, others have franchise taxes, and some have minimal ongoing filing requirements. Check your specific state's Secretary of State website rather than assuming a mailed notice reflects your actual state's requirements.
What should I do with a suspicious compliance letter I've already paid?
Contact your card issuer or bank to ask about disputing the charge, report the letter to the Treasury Inspector General for Tax Administration and the FTC, and forward it to your state's Secretary of State office so they can warn other business owners.
Is it really free to get an EIN in the United States?
Yes. The IRS issues Employer Identification Numbers at no cost directly through irs.gov; any company charging a fee for 'EIN registration' is not the IRS and is likely a scam markup or outright fraud.
How do I verify my state's actual annual report fee?
Go directly to your state's Secretary of State or business filings website rather than trusting a mailed notice, since the official fee is usually modest and clearly published.