IRS Issued a Warning to Employers Regarding ERC Claims

Employers, beware of third parties who make claims about being able to assist you with filing for the ERC as many of them are not qualified. Keep reading this blog to learn why you should only work with highly trained professionals. Businesses are committing a costly error if they deduct wages on their federal income tax return before claiming an employment tax credit. Unwittingly, this will lead to overstated wage deductions and hefty upfront fees when correcting the mistake with third parties. To avoid unwanted penalties, it’s best for businesses to first file their employment taxes claiming any credits prior to filing income taxes including deducted wages.

And this is just one of the reasons that The Internal Revenue Service has issued an urgently important reminder to employers: be certain of eligibility before claiming the Employee Retention Credit. Shortcuts taken could have costly consequences, so due diligence is essential! Businesses must remain vigilant for suspicious tax-reduction schemes that appear too good to be true. Taxpayers should ensure accuracy with their filings as the IRS takes any misstatements seriously, including repayment of miscalculated credits plus associated penalties and interest.

The ERC is an advantageous tax credit designed to assist businesses who stayed resilient throughout the pandemic. Not only can employers benefit from a refundable incentive for sustaining their workforce, but those affected by significant drops in revenue from March 13, 2020 through December 31 2021 may also be eligible for aid via this program. So whether you kept your employees on payroll or incurred losses due to downturns during these challenging times, be sure to take advantage of the benefits available with filing an original or amended employment tax return.

Organizations that experienced disruption due to the pandemic may be eligible for Employee Retention Credit (ERC) in the fourth quarter of 2021. However, employers must not submit claims related to wages used for PPP loan forgiveness or certain other tax credits. Should anyone have information about any illegal activities involving ERC claims, please refer to them immediately using Form 3949-A and report fraud or IRS phishing attempts through Treasury Inspector General Administration at 800-366-4484.

The Employee Retention Credit allows eligible employers to save money on wages paid after March 12, 2020 – and before January 1, 2022. To learn how you can claim this credit and determine your eligibility requirements visit for information regarding Notice 2021-20/23/49 & Revenue Procedure 2021-33/65.

Keep in mind that although we listed the information that you need in order to gain more information, we recommend that you do not attempt to apply for the ERC by yourself or via third parties who don’t have the qualifications and skills needed to do the correct job. This is, as this blog has warned you repeatedly, to avoid hefty fees and penalties. Reach out to a professional firm that focuses solely on filing these claims for their clients. Here at McKenzie Chase Management, we are the experts you can call on as we have helped our clients receive hundreds of millions of dollars. Let us help you too!
Contact us and learn how we can help your business recover what’s legally yours: (866) 547-8277, SMS/Text (206) 858-8048, Book a Meeting