If you heard any of the following statements from your ERC vendor, you should be concerned:
We process filings lightning fast.
Complete a 10-minute application, and in one week, we will tell you how big your potential tax credit is.
If eligible, you could receive up to $26,000 per employee.
Did your CPA say you are ineligible? You should get a second opinion, as we are the experts.
Act before it is too late. Do not miss out.
Things reached an alarming point and had gone too far when Kevin O’Leary, known as Mr. Wonderful from Shark Tank, started running aggressive Employee Retention Credit (ERC) ads while donning a chef’s hat.
The day of reckoning has arrived. The IRS, backed by Congress, is intensifying its pursuit of “bad ERC claims,” typically from promoters who have scammed the government and their clients.
So, just how bad is the situation? Here is a real example of an IRS audit on a flawed $1,000,000 claim – a financial disaster:
Net Cash Benefit of the Claim After Paying Taxes & Fees $523,000
Repaying the Claim (1,000,000)
Exam Fees (30,000)
Interest (350,000)
Penalties (150,000)
Net Cash Loss $1,007,000
Very scary! So, what should you do?
Your IRS Get Out of Jail Card... But It Comes at a Cost!
The IRS is aggressively examining ERC claims from promoters who have consistently filed ineligible claims. If you believe you have fallen victim to an ineligible claim, the IRS is allowing you to pay back the ERC amount minus 20 percent. Furthermore, the IRS is waiving interest and penalties. The filing and repayment deadline is March 22, 2024.
Let’s compare the difference of not opting for the voluntary payback on a $1,000,000 claim:
IRS Exam Voluntary Payback
Net Cash Benefit of the Claim
After Paying Taxes & Fees $523,000 $810,000
Repaying the Claim (1,000,000) (800,000)
Exam Fees (30,000) (10,000)
Interest (350,000) --
Penalties (150,000) --
Net Cash Loss $1,007,000 --
What is My Best Course of Action?
We recommend reaching out and contacting us to review the validity of your claims. Once you have our assessment, you can make an informed decision about whether you are at risk.
While nothing is guaranteed, we believe this is the most prudent approach. Remember, you must file and pay by March 22, 2024. Time is of the essence.