I recently came across an article written by Daniel Mayo, a contributing author to Forbes and a national tax partner for Withum, a “top 100” CPA/consulting firm. The article, titled “Will the IRS Deny Your Claim for the Employee Retention Credit?” discusses the risk of using an unqualified agent to process ERC claims. Like the author, we too have seen many “ERC mill” firms promote their tax credit services to employers, often without the requisite knowledge to expertly guide employers correctly through the complex maze of ERC tax credit legislation. We receive ERC tax credit promotions literally daily by companies who aggressively promote their ERC services and generally at very high contingency fee rates. Many of these companies are new/startups and may not be around if/when the IRS audits 941X returns which are filed to claim the ERC tax credits.
Employee retention tax credits are “real” and the rules/laws on eligibility and tax credit calculations are very complex. We have helped many small to medium sized employers obtain their ERC tax credits, in collaboration with reputable CPA/accounting firms, and in some cases have directly helped employer-clients with their own ERC eligibility determination and the resulting calculations and return filings. We know many employers exist who are still eligible for ERC tax credits, and we love to help our clients receive every dime of ERC tax credit money they are entitled to —–BUT Mayo’s article contains a wise word of caution to employers to make sure they engage reputable firms to help them identify ERC tax credits to which they are entitled. I suspect that the IRS will be further emboldened to audit some ERC claims due to the large number of questionable claims being filed by some of the “ERC mill” firms which have “popped up” during the past year.
The statute of limitations for filing ERC claims will start ending in July 2023 for Q2 2020 941 payroll tax returns, originally due July 31, 2020. If you have questions about your eligibility for ERC tax credits, please reach out to your CPA firm or to us at 317-885-7600 or email@example.com. Also be sure to check out our ERC blog posts to learn more about how to calculate and claim these tax credits.
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