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by PDH
The IRS charges exactly $0 for an Employer Identification Number. It takes 11 minutes online. Yet solo founders paid an estimated $340 million last year to filing mills, “compliance services,” and lookalike websites charging $200 to $800 for a free government document.
If you formed an LLC in the last 90 days, your inbox is already a target. Here’s how the scam works, why smart founders still fall for it, and the three-step filing path that costs nothing.
Why the EIN scam works on sharp people
The pitch isn’t aggressive. It’s bureaucratic. A letter arrives on official-looking paper from “EIN Compliance Division” or “Business Filings Center.” The envelope has a government seal. The deadline is 14 days. The fee is $249 or $399 or $800 depending on how upmarket the shop is.
Founders who just paid $100 to a state for Articles of Organization assume this is the next step in a sequence. It isn’t. The sequence ends at the state. The EIN is a separate, free application at irs.gov that takes less time than brewing coffee.
The scammers win because new founders don’t yet trust their own judgment on what’s “real” paperwork and what’s noise. A good shelf of entrepreneurship books (https://amzn.to/4d11LZE) builds that pattern recognition — once you’ve read three or four founders describe getting the same letter, the fog clears.
The actual EIN process, in 11 minutes
- Go directly to irs.gov and search “EIN assistant.” Verify the URL ends in .gov before you type anything.
- Apply between 7 a.m. and 10 p.m. Eastern, Monday through Friday. The system is closed outside those hours, which is itself a signal that any 24/7 “EIN service” is a reseller.
- Select the entity type that matches your Articles — usually single-member LLC taxed as a disregarded entity, or multi-member LLC taxed as a partnership.
- Enter the responsible party (you), the LLC’s legal name exactly as filed with the state, and the formation date.
- Download the CP 575 confirmation letter immediately. The IRS will not re-issue it. Save a copy to cloud storage and print one for your records.
That’s the entire process. No filing service, no “expedited handling,” no compliance subscription. Keep the CP 575 in a labeled folder in a filing cabinet or a dedicated binder on your desk — this is the one document your bank, your payroll processor, and the IRS itself will ask for repeatedly over the next decade.
The four lookalike letters to shred on sight
Beyond the EIN scam, four other mailers target newly-formed LLCs in the first six months. Learn the pattern once:
- “Certificate of Status” requests for $75 to $200. Your state issues these for $10 to $25 directly if you ever need one. You usually don’t.
- “Annual Minutes Compliance” notices charging $150 to draft meeting minutes. LLCs are not required to hold annual meetings in any state. Corporations are. Shred.
- “Labor Law Poster” mandatory purchases for $89 to $120. If you have zero employees, you need zero posters. Even with employees, free posters are available at dol.gov.
- “Beneficial Ownership Information filing services” charging $200 to $500. BOI reports under the Corporate Transparency Act are filed free at fincen.gov in about 15 minutes.
Build a simple triage habit: any mail about your LLC gets held for 24 hours before you act. A standing desk (https://amzn.to/4uxCkoc) with a dedicated “pending mail” tray on the left and a shredder underneath handles the entire system. Nothing legitimate from a government agency has a 14-day fuse that requires a credit card.
What’s actually worth paying for in year one
Avoiding scams doesn’t mean avoiding spending. Three line items genuinely earn their cost in the first year of an LLC:
A domain and professional email, roughly $50 for the year. A yourname@yourllc.com address does more for your credibility with banks and vendors than any filing service. Hostinger bundles the domain, business email, and a basic site at a price that undercuts buying each piece separately. Set it up the same day you get your EIN so your bank application uses the professional email, not a Gmail account.
A registered agent in your formation state if you don’t live there, $100 to $150 per year. If you formed in Wyoming or Delaware from another state, this is non-negotiable — the agent accepts service of process so you don’t miss a lawsuit. If you formed in your home state and live there, you can be your own agent for free.
A single accounting consultation before you take your first dollar, $200 to $400. One hour with a CPA who handles LLCs clarifies whether to elect S-corp status, how to pay yourself, and what to track from transaction one. This is the highest-ROI meeting of your first year.
Everything else — the filings, the EIN, the BOI report, the operating agreement template — is free or near-free if you do it yourself. A decent business notebook to track deadlines and decisions costs less than a single scam letter.
The compliance calendar that prevents the real penalties
The scam letters distract from the actual deadlines that carry real IRS and state penalties. Put these five on your calendar the week you form:
- BOI report: within 90 days of formation for 2024+ entities. Free at fincen.gov. Penalty for missing: $591 per day.
- State annual report: varies by state, usually the anniversary month. $50 to $300 depending on state. Missing it administratively dissolves your LLC.
- Federal tax return: March 15 for partnerships, April 15 for single-member LLCs filing on Schedule C.
- State franchise tax or annual fee: California charges $800 minimum regardless of revenue. Know your state’s number.
- Estimated quarterly taxes: April 15, June 15, September 15, January 15 if you expect to owe more than $1,000.
The mindset shift
New founders treat every official-looking letter as a task to complete. Experienced founders treat every official-looking letter as a claim to verify. The shift is from reactive compliance to proactive calendar — your filing deadlines live in your own system, not in whatever envelope arrived this morning. Once your calendar owns the deadlines, the scam letters become what they actually are: junk mail with a logo.
Next step
Before you close this tab: open irs.gov in a new window and get your EIN if you don’t have one, then click through to Hostinger via the link in this post and claim your domain and business email in the same sitting. Both tasks fit in a single lunch break. The LLC that files its own EIN, owns its own domain, and knows its own deadlines is the LLC that survives year one without donating $800 to a filing mill.
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