Business owners, beware! It is our duty as your tax advisors to inform you of a new scam targeting small businesses under the guise of the Corporate Transparency Act (CTA).
What is the Corporate Transparency Act?
The CTA went into effect on January 1, 2024, and requires most US-based small businesses to file first-time beneficial ownership information reports with the Financial Crimes Enforcement Network (FinCEN).
How the Scam Works
Scammers are exploiting the lack of awareness and understanding surrounding the CTA by sending out a fraudulent “Form 4022.” In reality, Form 4022 does not exist, nor does its supposed sender, the US Business Regulations Department.
In the fraudulent mailing, the scammers include an official-looking letter asking for a filing fee along with the made-up Form. The Form requests sensitive information about your business that could be used to commit further fraud. To add legitimacy, the scammers incorporate official-looking seals, watermarks, and a notice ID number.
Tips to Protect Yourself
Verify Correspondence: Always confirm the legitimacy of government-related communications. When in doubt, contact the government office directly using the official phone number. A simple Google of the US Business Regulations Department would reveal that this organization does not exist.
Check for Red Flags: Scrutinize letters for grammar, spelling, and formatting errors. Official documents maintain high standards in language and presentation.
Ensure Website Security: When prompted to visit a website or scan a QR code, verify the website’s security with “https://” in the address. Genuine government websites end in .gov.
Stay Quiet: Cease all communication immediately upon suspecting a scam. Avoid responding to calls, letters, or emails, and block any associated numbers.
Report: Report fraudulent IRS forms or any suspicious activity to the FBI through ic3.gov.
If you believe you have been affected by this scam
Please reach out to your tax advisor immediately. It is important to inform necessary professionals, such as your lawyer, accountant, and IT consultant of the suspected scam so they can help minimize any potential fallout.
As the CTA brings about regulatory changes, scammers are capitalizing on confusion. Stay informed, stay cautious, and protect your business from falling victim to these sophisticated scams. If you encounter any questionable communications, consult your Wegner CPAs advisor for assistance in determining whether you have received a legitimate request or are a victim of a scam.
