{"id":11277,"date":"2023-05-19T07:00:04","date_gmt":"2023-05-19T12:00:04","guid":{"rendered":"https:\/\/www.cainwatters.com\/digitalblogs\/?p=11277"},"modified":"2023-09-15T09:54:30","modified_gmt":"2023-09-15T14:54:30","slug":"avoid-erc-tax-scams","status":"publish","type":"post","link":"https:\/\/www.cainwatters.com\/digitalblogs\/avoid-erc-tax-scams\/","title":{"rendered":"IRS Warns About Employee Retention Tax Credit Scams"},"content":{"rendered":"\t\t
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UPDATE<\/span>: <\/span>IRS PAUSES NEW ERC CLAIMS <\/span><\/span>\u00a0<\/span><\/span><\/h4>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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On Sept. 14, 2023, the IRS announced<\/a><\/span><\/span> that n<\/span><\/span><\/span>ew claims<\/span><\/span><\/span> for the <\/span><\/span><\/span>E<\/span><\/span>mployee <\/span><\/span><\/span>R<\/span><\/span>etention <\/span><\/span><\/span>Tax C<\/span><\/span>redit, or ERC, <\/span><\/span><\/span>won\u2019t<\/span><\/span><\/span> be processed until at least 2024<\/span><\/span><\/span>. <\/span><\/span><\/span>The credit ended on Oct. 1, 2021,<\/span> but businesses could still apply retroactively by filing an amended payroll tax return. <\/span>However, d<\/span>ue to an influx of fraudulent claims, the IRS <\/span>has<\/span> pause<\/span>d <\/span>this<\/span> pandemic-era<\/span> tax credit<\/span> until at least next year. Read more about this update at IRS.gov<\/a><\/span><\/span>.<\/span><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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It's now on the IRS infamous \"Dirty Dozen\" list<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Annually the IRS releases its list of the worst tax scams that taxpayers need to be on the lookout for in the current and coming years.<\/p>

This annual list of schemes and scams is aimed at helping raise awareness to protect honest taxpayers from aggressive promoters and con artists. These schemes put people at financial risk and increase the chances of becoming victims of identity theft.<\/p>

This year, the IRS Dirty Dozen list<\/span><\/a> was topped with a warning on egregious promoter claims surrounding the Employee Retention Tax Credit. You\u2019ve likely received promotional emails and ads in recent months claiming that you are eligible for too-good-to-be-true tax rebates. These promotions can be based on inaccurate information related to eligibility for and computation of the credit.<\/p>

The IRS has clearly stated that they are stepping up enforcement action involving these ERTC claims, and people considering filing for these claims \u2013 only valid during the pandemic for a limited group of businesses \u2013 should be aware they<\/em> are ultimately responsible for the accuracy of the information on their tax return (not the agency the tax payer may have hired to facilitate the claim).<\/p>

Although CPA Zane Harris<\/span><\/a> reminds business owners that the credit itself is fine for those that are eligible, it is the promoters advertising the credit to everyone and anyone that causes the problem.<\/p>

\u201cWe saw this before with the Research and Development credits, and it\u2019s a similar story now,\u201d says Zane. \u201cThese companies are promoting exaggerated numbers, offering to file the return for you, for a percentage fee, of course, and then you will not hear from them again. They do not and will not do any audit defense for you when the IRS comes calling.\u201d<\/p>

Should you feel that your business is eligible for the credit, the rules below list the requirements.<\/p>

ERTC ELIGIBILITY REQUIREMENTS:<\/strong><\/h5>

The eligibility rules governing the ERTC have undergone several revisions since it was first introduced in March 2020.<\/p>

This summary should level-set the main expectations and requirements.<\/p>