Some ERC Talk ... Again

Yes, here comes more talk of the Employee Retention Credit, and if you are a business owner, you may very well be sick of hearing about it.

I have written previously about the proliferation of fly-by-night companies that have popped up promising businesses high returns on IRS credits that they could have for just a small fee. I won’t go into the issues with these offers again here, but you know what they say about things that sound too good to be true …

But now there is another reason to shy away from these offers as IRS Commissioner Danny Werfel spoke last week about how the agency is going to turn increased attention toward looking into these claims.

"The further we get from the pandemic, we believe the percentage of legitimate claims coming in is declining," he said. "Instead, we continue to see more and more questionable claims coming in following the onslaught of misleading marketing from promoters pushing businesses to apply. To address this, the IRS continues to intensify our compliance work in this area."

Of course, this doesn’t mean that businesses who qualify for the credit should not pursue getting it, but it does mean that they should be very confident that they qualify for the credit before submitting any paperwork for it.

This has become so big that it may even be worth reading a news release from the IRS that discusses the matter. This covers many things from how unsavory individuals aggressively market applying for the credit, how they lure victims, what one can do to protect yourself from it, and how one actually qualifies for the credit.

I am not of the mind that someone can go to this link and suddenly have clarity on the situation and know exactly where they stand. The fact that these rules aren’t easily and instantly understandable is something that scammers are able to take advantage of, after all. But one can fall back on what the IRS puts atop its list of how businesses can protect themselves – work with a trusted professional.

When someone contacts you out of nowhere, it is a good rule of thumb to always approach that with a healthy dose of skepticism. They often speak with just enough truth to tempt and there is nothing wrong with a little temptation. Allow yourself the time to find the full answers, though, and you will protect yourself from the IRS and its promised increased efforts to track down those abusing these credits.

​Warmly,

Josh Bousquet
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