ERC Scams

Every year the IRS releases its Dirty Dozen list of tax scams. It was not much of a surprise that the agency began this year’s list with talking about Employee Retention Credit schemes.

If you are a business owner, you deserve a medal if you have avoided getting phone calls and/or emails from people claiming that they can help you receive some of this credit. The trickiest thing about these offers is that it can all feel pretty legitimate – the Credit itself is a real thing after all. Without getting into the details, it is based on giving back to companies that struggled some during the pandemic while still keeping people employed. It is not a new thing that was just passed, but companies aggressively seeking to help with obtaining the credit have recently proliferated.

And if someone comes by and can help you claim this credit- then your business gets paid the credit, the ERC facilitators take a percentage, everyone is getting free money they didn’t have before, this is a win-win all around, right?

Well sure, if things are done correctly.

There are companies popping up who are only doing these type of claims, though. They are militantly marketing themselves to all businesses, and it is all a setup for quickly handling some of these, then disappearing.

So here are some things to keep in mind –

If you have already received this credit, you can’t get it again.  These companies are sending out messages to EVERYONE, and despite their claims that you could be eligible, this is not something new you can explore after already getting this credit.

This is a real credit, though, and if you have not yet received it and want to look into whether or not you qualify, you should.  Just do this with someone you already trust and don’t give in to heavy marketing tactics from someone you have never heard from before. You can then have greater confidence that all was done in the correct manner - and you will probably pay less of a fee, too.

When things sound too good to be true, they often are. This can be a very valuable credit to many, but there are some rules around it that mean everyone doesn’t’ just automatically get the maximum allowed. When someone promises you more than seems reasonable, that’s most likely because they aren’t being reasonable.

Finally, this is such a dangerous scheme because it is tied into so much truth. A potential scammer can give the highlights of this potential credit, you can look it up, and all the basics will line up. Just remember to give yourself that extra bit of time to run this by a trusted professional, and not a fly-by-night operation, to be sure you are getting what you are entitled to in the correct manner.

Warmly,

Josh Bousquet
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