Watch Out For Scams

Aaron Meyer

11 Sep
Finance Self-Employed Taxes

We’ve all seen weird numbers pop up on our phones that end up being a telemarketer or scam call but what most people don’t realize is there are similar scams and annoyances that target and affect businesses too.

The most common and innocuous of these scams are Labor Law Poster providers. In most states, it is the law to display up to date labor law notifications in employee gathering spaces, updated annually. But what many people don’t realize, especially new business owners, is that those notices are provided FREE on state labor websites to download and print for display. Yet there are companies that have alerts for any new businesses registered in every state that will send out “notices” that have official-looking seals and language “offering” laminated labor law posters for around $100. What these cleverly disguised business propositions really offer is a service that while not illegal is a little sketchy considering the way it’s presented comes off as an official government notice that is meant to trick unwary new business owners into thinking they need to pay for these posters as a law, rather than a service.
If you get one of these, send it to your accountant before acting; they will let you know it’s not required and direct you to where you can get them free. Also, if the only person working at your business is you, then you don’t even need to display the free notices at all.

Some of the more dangerous scams involve “phone farms” that spend all day and night contacting tax paying entities to state that they are sending police or federal officers to your location because of unpaid tax debt (regardless of whether a debt actually exists) and asking for payment and Social Security/EIN to execute the payment. First know this: the IRS will NEVER call you. EVER. They will send notices, letters, levy threats, and if those are ignored, they will simply show up at your house/office and demand your documents.

If you receive a phone call from someone claiming to be a tax official or government agent, you should do the following:

  • Request they identify themselves fully, including full name, contact information, government agency identification, and proper number to return calls to.
  • Get off the phone with them and immediately contact your preferred tax professional and/or legal counsel to give them that information. You should never, EVER, speak to a government/tax official yourself because you can inadvertently give incorrect or even just too much information to that official. Consult your CPA first.
  • Get your house in order: make sure your bookkeeping is fully up to date and reconciled, that you have documents backing up your entries, that the financials match the filed returns with the government agency in question.
  • Listen to your CPA but remember to only provide the specific documentation the agency is requested for the time period in question. Do not volunteer for further information.

If you are a Formations customer, you have someone in your corner already to help you with this. If you get a weird notice or call you can contact your customer success manager and we will leap to your defense with clear instructions and speak to the necessary parties to clear up any valid issues.
We will also advise when the contact you’ve received is illegitimate, and report them to the FTC (Federal Trade Commission) for investigation and prosecution. Contact us today to see how Formations acts as the best business insurance you can buy.

Not a Formations customer yet?

Schedule a free consultation call!

Other interesting articles

Save thousands of dollars on taxes, make better financial decisions, and get access to corporate-level benefits.

Schedule a Call