At Chasse & Company, we want to keep you informed about recent developments regarding Employee Retention Credit (ERC) claims and the IRS. As you may be aware, the IRS is now taking a closer look at claims that were filed incorrectly, especially those that came in after the original deadline.
During the pandemic, the ERC wasn’t the first choice for many companies seeking financial support during shutdowns. However, after the program ended, some legal professionals set up Credit Mills to file claims based on unclear rules, resulting in a significant increase in filings with the IRS.
Recognizing the situation, the IRS has labeled the ERC program as the number one tax scam in the United States. As your trusted advisors, we want to emphasize the importance of caution in navigating this landscape.
Having thoroughly examined the program requirements, we strongly advise against engaging with credit mills or agencies promising substantial refunds. We recommend working with firms like ours, where accountability in filings and appropriate bonding are a priority. Our analysis indicates that very few of our clients actually qualify for the ERC.
If your company is considering dealing with Credit Mills or firms handling ERC claims, we urge you to seek legal advice first. For those who may have unknowingly submitted false claims, the IRS has introduced the ERC Withdrawal Program, allowing companies to reverse mistaken claims without taking on additional financial risk. Please note that this forgiveness program is temporary, so timely action is crucial.
It’s essential to be aware that knowingly submitting false tax claims has no time limit for audit. The potential costs, including interest, penalties, tax repayment, and lost fees tied to false claims, could significantly impact your company’s ability to thrive. Taking proactive steps to address any mistakes and collaborating with reputable professionals is key to navigating these challenges successfully.
We are here to assist you in understanding and managing these complexities. Please feel free to reach out if you have any questions or concerns.
Dan Chasse
CPA, Managing Partner
Chasse & Co.