IRS Impersonators: How EIN Filing Sites Trick Entrepreneurs

Starting a business often feels like navigating a maze of paperwork, and for many entrepreneurs, securing an Employer Identification Number (EIN) is a critical step. The Internal Revenue Service (IRS) offers this nine-digit identifier for free through its website, a straightforward process that takes minutes. Yet, some private companies have turned this simple task into a pricey pitfall, charging up to $300 for a service that costs nothing if obtained directly from the government.

The Federal Trade Commission (FTC) has taken notice. On April 1, 2025, agency staff sent warning letters to operators of websites offering EIN filing and delivery services, flagging practices that may deceive consumers. The issue? These sites often present themselves in ways that blur the line between private business and government authority, potentially violating laws designed to protect the public from misrepresentation.

Consumer complaints paint a vivid picture of the tactics in question. Some websites mimic the IRS by using similar seals, logos, and color schemes, while others sprinkle terms like 'IRS' or 'EIN Assistant' - the name of the IRS’s free tool - across their pages. In certain cases, the sites bury disclaimers about their private status in fine print, leaving users unaware they’re not dealing with a government entity. For someone rushing to register a nonprofit or hire a nanny, the confusion can lead to an unexpected hit to the wallet.

This isn’t a new problem. Deceptive marketing tied to government services has spiked in recent years, from healthcare scams to fake job offers promising federal employment. The FTC points to cases like Symple Health, where a $195 million judgment followed misrepresentation of limited benefits as full insurance. Here, the stakes are lower but the pattern holds: exploiting trust in official systems for profit.

Beyond the design tricks, pricing is a sticking point. The IRS provides EINs at no cost, yet these third-party services tack on fees that can climb into the hundreds of dollars without clearly explaining why. Consumers report feeling misled when they later discover the free alternative, a frustration echoed in broader trends. Last year alone, government imposter scams drained over $577 million from victims, according to the Social Security Administration, underscoring how lucrative confusion can be.

The FTC’s letters warn that such practices might breach the FTC Act and the Impersonation Rule, which bar posing as a government agency or misrepresenting affiliations. Penalties could reach $53,088 per violation, with companies also facing demands to refund affected customers. It’s a sharp reminder that legal risks loom large for those who skirt the line.

The EIN crackdown fits into a larger FTC push to curb deceptive practices. In 2024, the agency returned $337.3 million to consumers hit by scams, up from $324 million the year before. Recent victories include a $99.3 million refund from Benefytt Technologies for misleading health insurance claims. Historically, the FTC has evolved from its 1914 roots in antitrust to tackle modern fraud, adapting to digital trickery like robocalls and fake websites. Still, with consumer fraud losses jumping 25% in 2024, the fight remains uphill.

Not everyone sees it as enough. Some argue the FTC’s enforcement, while impactful, struggles to keep pace with sophisticated scams fueled by AI-driven advertising and lax oversight on digital platforms. Others point out that small businesses, often the targets here, need clearer guidance to avoid these traps in the first place.

Education is a key piece of the puzzle. Campaigns like National Consumer Protection Week and Slam the Scam Day aim to arm people with tools to spot fraud - think unsolicited calls or flashy websites demanding upfront cash. The FTC urges consumers to double-check sources, noting that legitimate government services rarely come with hidden fees or urgent payment demands. For EINs, a quick visit to IRS.gov can save both money and headaches.

Yet awareness only goes so far. Trust in online services is fraying, with the Thales 2025 Digital Trust Index showing a steep drop across industries. Phishing sites mimicking brands like Amazon have exploded, and 82% of consumers ditched companies over privacy fears last year. When even free government offerings get tangled in deception, rebuilding that confidence becomes a taller order.

The FTC’s warning letters don’t accuse the EIN site operators of breaking the law outright - not yet. Instead, they’re a nudge to review advertising and scrub anything that could mislead. It’s a practical step, but one that hints at bigger questions. As digital tools make impersonation easier, regulators and businesses alike face pressure to draw clearer lines between convenience and con.

For everyday people - the entrepreneur launching a startup, the family sorting an estate - the takeaway is simpler. Free services shouldn’t come with a catch, and a little skepticism can go a long way. The FTC’s latest move is one piece of a messy, ongoing effort to ensure that what looks official actually is.