You have likely heard or read advertisements encouraging you to call a certain consulting service regarding qualification for the Employee Retention Credit (ERC). This refundable tax credit encourages businesses that were financially impacted by COVID-19 due lost revenue and extra costs in order to keep employees on their payroll. The problem is that there are unscrupulous players who reach out to high-level business officers and offer to file amended payroll reports. The upfront cost to prepare the amended payroll reports is typically a percentage of the credit.
All ERC reports are audited by the IRS to determine if the employer actually qualifies. Many returns are processed fraudulently, meaning the business does not actually qualify but the "crooks" submit the amended payroll reports anyway on behalf of the unsuspecting employer. Further, subsequent acts by Congress have changed the requirements to qualify for the ERC, which is used by these firms to advertise with something like "most employers qualify now" or "your business will likely qualify regardless of revenue" or "we can assess your qualification with a few questions.”
If you have questions about your business's qualification for the ERC, please reach out to the CPA who usually prepares and files the company’s tax returns. If they are not familiar with the ERC, they will know someone or we can refer to you someone. We encourage you to stay connected with the professional advisors who are familiar with your business rather than trust a remote contact that may not be legitimate.