Latest Addition to the Dirty Dozen

If you haven’t already heard or read, the IRS has recently started publishing its 2023 Dirty Dozen list.  The first item is a warning to watch for companies aggressively marketing the Employee Retention Credit ('ERC' or 'the Credit') by telling organizations they can receive $26,000 of payroll tax credits per employee. Many of these promoters are not only falsely advertising the credit per employee but are also qualifying ineligible businesses for the Credit. Businesses and organizations should remember that there are specific guidelines for claiming the Credit, and ultimately, the business is responsible for the accuracy of the credits it is filing. 

ERC tax relief is a federal program in response to the COVID-19 pandemic, rewarding employers that retained their employees by refunding portions of qualifying wages.  To qualify for ERC, employers must have had operations fully or partially suspended at their business due to governmental orders or have had a significant decline in gross receipts during the pandemic.

This program can be a saving grace for many eligible businesses; however, “Anyone who’s considering claiming [ERC] needs to carefully review the guidelines,” said Daniel Lauer, IRS Director of the Small Business/Self-Employed Examination. The IRS revealed that one of the most frequent issues is in the form of ERC fraud on the Forms 941-X. Due to the backlog of amended claims and scrutiny of the Employee Retention Credit, Mr. Lauer explained that his group of examiners will be focused on ERC throughout the coming year.

While claiming ERC can be convoluted and involved, reach out to one of our tax professionals today. We can help provide accurate information to ensure you qualify for ERC and that your proposed claim is precise and well-supported.

To read the ERC article about claiming expired credit, click here. To read the Dirty Dozen article, click here.