The Internal Revenue Service (IRS) has issued yet another warning about Employee Retention Credit (ERC) scams by adding them to the annual Dirty Dozen list of tax scams. The IRS is concerned about promoters who aggressively advertise ERC refunds on radio and the internet, often providing inaccurate information about eligibility and computation of the credit.
IRS Commissioner Danny Werfel emphasizes that businesses should be cautious when filing for these credits, as specific guidelines surround the pandemic-era ERCs. The IRS is actively auditing and conducting criminal investigations related to false claims, urging honest taxpayers to avoid these schemes.
The IRS is increasing enforcement action on ERC claims. It bears repeating that people are ultimately responsible for the accuracy of their submission. The IRS Small Business/Self-Employed division has trained auditors to examine such claims, and the IRS Criminal Investigation Division is on the lookout for promoters of fraudulent claims.
The annual Dirty Dozen campaign highlights 12 scams and schemes that put taxpayers and the tax professional community at risk. The list is not a legal document or a formal listing of agency enforcement priorities. Still, it raises awareness and protects honest taxpayers from aggressive promoters and con artists.
Werfel advises businesses to be wary of advertised schemes and direct solicitations promising tax savings that are too good to be true. Inappropriately claiming the ERC may result in business owners having to repay the credit, potential penalties, and interest.
The ERC is a refundable tax credit designed to support businesses that continued to pay their employees during the COVID-19 pandemic shutdown or experienced a significant decline in gross receipts during the eligibility periods. The credit is only available to business owners and despite scammy claims, is not available to employees.
At AmpliFi, our goal is to help eligible businesses with a suite of financial services, including filing for the ERC credit legitimately and in compliance with IRS guidelines. We are so confident in our team's ability to help clients that we provide audit protection at no additional charge. If you have yet to file for your ERC credit because you were unsure, we can help. Click here to learn more and submit your company information for pre-qualification.