The Employee Retention Tax Credit (ERC) established under the CARES Act provides much-needed support to businesses adversely affected by the pandemic. However, numerous unscrupulous third-party tax credit preparers have taken advantage of many small business owners and pushed them into claiming ERC credits they may not have qualified for.
Ever since the ERC credit became widely available for businesses to claim, there has been a boom in unscrupulous third-party preparers making false and exaggerated claims about businesses’ eligibility for the ERC credit and leading their clients to claim credits they were not actually eligible for. After charging hefty contingent fees, these third-party tax credit preparers put business owners at risk of IRS audits and facing potentially serious financial penalties for their businesses.
In recognition of these abuses, and the increase in fraudulent ERC credit claims, IRS recently announced a temporary moratorium on processing new ERC credit claims. IRS is also aggressively auditing businesses that have already claimed ERC credits, and has extended the deadline for auditing some of the ERC credit claims.
If you (or your business) has received an ERC credit, you need to prepare for the possibility of an ERC credit audit. If your business is audited, you will have to prove to IRS that your business meets the ERC eligibility criteria established under the CARES Act and subsequent Covid-related legislation.
At Willi Law Office, LLC, we can review your ERC claim and help you prepare for a potential ERC audit so that the IRS won’t catch you off guard.