In the list of tax scams, the IRS has spotlighted Employee Retention Credits following blatant attempts by promoters to con ineligible people to claim the credit. Promotors, are blasting ads on radio and the internet promising refunds involving Employee Retention Credits (ERCs)
“The aggressive marketing of these credits is deeply troubling and a major concern for the IRS,” said IRS Commissioner Danny Werfel. “Businesses need to think twice before filing for these credits. While the credit has provided a financial lifeline to millions of businesses, there are promoters misleading people and businesses into thinking they can claim these credits.”
The IRS has last fall, warning about this scheme but there continue to be attempts to claim the ERC during the 2023 tax filing season.
PROPERLY CLAIMING THE ERC
Eligible taxpayers can claim the ERC on an original or amended employment tax return for qualified wages paid between March 13, 2020 – December 31, 2021.
To eligible employers must have:
- Sustained a full or partial suspension of operations due orders from an appropriate governmental authority limiting commerce, travel or group meetings because of COVID-19 duting 2020 or the first three quarters of 2021
- Experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021,
- Qualified as a recovery startup business for the third or fourth quarters of 2021.
“Businesses should be wary of advertised schemes and direct solicitations promising tax savings that are too good to be true.” Werfel said. “They should listen to the advice of their trusted tax professional.” [i]
Contact us if you have any questions about ERCs.
[i] This blog was citied from https://www.irs.gov/newsroom/irs-opens-2023-dirty-dozen-with-warning-about-employee-retention-credit-claims-increased-scrutiny-follows-aggressive-promoters-making-offers-too-good-to-be-true#