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Beware of the Latest Tax Scam: Employee Retention Tax Credit

Beware of the Latest Tax Scam: Employee Retention Tax Credit

November 06, 2023

The IRS wants you to know about the latest tax scam making headlines involving the Employee Retention Tax Credit (ERC), a pandemic-era tax break designed to assist qualified businesses.

The Internal Revenue Service (IRS) has been closely monitoring a surge in deceptive tactics employed by scammers to manipulate and misrepresent the ERC. You have probably received a number of these calls from "businesses" that will assist you in applying for the ERC. Don't be fooled!

According to the IRS, these scammers will use online, mail, and radio/TV advertising to reach potential victims. They often use high-pressure tactics, claiming an "easy application process" and promising to determine eligibility in minutes. You know that taxes are complicated, and any person contacting you telling you that they can assess your company's eligibility in minutes should automatically send up a red flag.

The IRS is Taking Action

On September 14, 2023, IRS Commissioner Danny Werfel made a significant announcement. The IRS decided to temporarily halt the processing of new ERC claims until the end of the year. This pause was deemed necessary to address the growing concerns regarding questionable claims and the increasing number of honest small business owners falling victim to unscrupulous scammers. Claims submitted before September 14, 2023, will continue to be processed, but the IRS urges businesses to work with a trusted CPA or tax preparer.

Filing an ERC Claim

If you are planning to file a new ERC claim, you need to work with a trusted tax professional who can walk you through the requirements before you submit the claim. Contact our team to discuss how you can file your ERC claim.

What to Do If You Were Scammed

Contact the IRS! You can do this by completing Form 14242 and sending it to the IRS Lead Development Center in the Office of Promoter Investigations.

Protect your business in the future by contacting our team to discuss your specific situation and if your business will qualify for this and other tax credits.