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Scam-O-Rama: Annual Colorado Secretary of State Reporting Requirement and A Couple of Others

04/02/2011

In spite of the fact that April 18 looms large on my horizon, I could not help myself from commenting on a few well-presented and scary scams that may be lurking in YOUR mailbox.  All were shared with us by clients who should be applauded for double checking before reacting.

 Secretary of State Filing.  In Colorado, if you do business as an entity or as a sole proprietor with a trade name, you register with the Secretary of State. Then on the anniversary date, or thereabouts, each year you go online and validate your entity or trade name by updating your contact information (essentially). If you file timely, the fee is a whopping $10. The Secretary of State has always sent post card reminders in the past, but will no longer do so. You can sign up to get an email reminder that appears about 2 to 3 months ahead of the due date.

Here is the scam (or legitimate request to offer assistance, depending on your view point): On a “notice” that is designed to look exactly like correspondence from the Colorado Department of Revenue (which has no involvement with annual corporate reporting), a company, who shall remain nameless here, headlines the letter with “Periodic Report, Directors/Shareholders, Colorado Corporate Control [followed by the corporations official and easy-to-get corporate registration number—it is public information].

The first two paragraphs quote state law regarding the requirement to file annually with the Secretary of State with an admonition to fill out the form and return it to an address along with $225 (remember that it costs $10 to renew your report).

Then down near the bottom, in slightly smaller print is the statement that the “product or service” offered by this letter has NOT been approved or endorsed by any government agency, that it is simply an advertisement/solicitation and is not a bill or a statement or an invoice or anything else – and that you have no obligation to respond in any way.  So….DON’T RESPOND. Simply put this nonsense through your shredder. It is trash. Unless of course, you think that you should spend $225 to do something you can do in under five minutes for $10.

Employee Information Posters. Various companies sell posters informing your employees of their rights regarding wages and safety. These posters are required in the workplace. But don’t fall for the threats in the letters, that if you don’t get them NOW from the solicitor of the appeal, you will go to jail. Instead, find out if your state’s Department of Labor has templates or even provides posters. Go online and shop for posters. You are bound to get a much better deal.

“IRS” Contacts You by Email. There is an email circulating that looks like an IRS notice—same identical letterhead complete with eagle. It tells you to go immediately to a web site (NOTE: that it is not www.irs.gov but rather www.irs.org) and provide a bunch of personal information in order to get yourself out of trouble. When you go to www.irs.org you will find myriads of ads for people and companies who will charge you a lot of money to get you ‘free and clear’ (or not).

The IRS will NEVER EVER contact you first by email. They may call, but if they do, do not hesitate to say that you are not sure who you are really talking to and that you would prefer to receive a letter. Especially if the person at the other end does not seem to know a lot about you. Trust me, the IRS knows a lot about you. But…you can still demand to be contacted by mail. It is your right.

 Bottom line – READ CAREFULLY. Be cautious. If you are pretty sure you are not out of compliance, you are probably right.

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