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The Berman Buzz

Employee Retention Credit (ERC) Update


Male and female employee calculating invoice

It appears that every couple of weeks, news related to the Employee Retention Credit (ERC) resurfaces, yet it often goes unnoticed by the general public.


A RECAP OF THE EMPLOYEE RETENTION CREDIT

In June, the IRS provided guidance that debunked arguably the most abused eligibility claim, which was the notion of a partial supply chain shutdown. While those not inclined to file false claims were already aware of this, the information was still valuable.


In September, due to a surge in illegitimate and unauthorized claims for the ERC, the IRS imposed an immediate suspension on processing new credit claims, expected to last until the end of 2023. The IRS has taken this action to safeguard honest small business owners from potential scams orchestrated by untrustworthy promoters who file questionable claims on their behalf.


Now, the IRS has unveiled a withdrawal process for taxpayers concerned about ineligible claims.


THE FRAUD PROBLEM

Undoubtedly, some individuals filed claims under the presumption that the consultant they engaged was the expert and that this expert had certified their eligibility. This is the point at which the challenging issue of self-certification becomes relevant.


For those who engaged one of these consultants, there is a high probability they will find language on their engagement letter indicating the consultant is vouching for nothing more than taking the provided information, multiplying it by 50 percent for 2020 and 70 percent for 2021, and then instructing their client to complete a 941X form with specific numbers. We have seen ERC service providers modify the quarter-to-quarter gross receipt comparisons to make it appear that clients qualify for the credit, which is an act of fraud.


HERE TO HELP

We have assisted numerous clients in successfully filing eligible ERC claims, and our team is currently evaluating ERC claims for individuals concerned about claims filed by other consultants. Our review includes a comprehensive examination of the eligibility documentation and the calculations involved. If any issues arise, we can guide you through the new withdrawal process. Contact us at 407-841- 8841 to let us know how we can best support you.

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