I’ve heard numerous accounts of “tax specialists” and promoters claiming to be able to help with the Employee Retention Credit (ERC), some even saying they’ve gotten “special IRS training” for it. Naturally, they demand a high price for this “expert” assistance.
Any company thinking about submitting an ERC or one that has already received one should be aware that the IRS has begun auditing ERCs, some even before they are paid. An IRS representative claimed to have trained 300 auditors to analyze claims regarding the ERC during a recent conference. Additionally, IRS criminal investigators focus on taxpayers, ERC enablers, and promoters who go beyond what is required to qualify for the ERC.
The ERC rules can be quite complex. Tax practitioners can expect the IRS to focus on ERC eligibility, the computations, and whether taxpayers amended business tax returns to pay for the increase in tax resulting from the ERC-related payroll tax reductions. They may also ask for payroll journals, health plan expenses, lists of employees and owners, information supporting the partial suspension of operations test or the gross receipts test, and information related to the PPP loan forgiveness and allocation of wages between the PPP and ERC.
If done correctly, the ERC can greatly benefit a business that needs help. If you are considering applying for, have already applied for, and received the credit, now is the time to double-check your analysis, computations, documents, and facts. It is better to do it now, not two or three years from now when the IRS is knocking on your door.
Schedule Your Free ERC Tax Consultation Today on how the ERC could benefit your business or whether you are compliant.
The IRS is increasing audits of these claims, so don’t wait until it’s too late.