IRS Focuses on Employee Retention Fraud

Has your organization received the Employee Retention Credit (ERC)?  

Are you sure you met the requirements?  Anyone who improperly claims the ERC must pay it back, possibly with penalties and interest.  Many organizations received large credits and having to pay it back could be detrimental to the organization's future.  

In a recent News Release, the IRS Commissioner noted that they are “intensifying compliance work and putting in place additional procedures to deal with fraud in the program.”  The program was originally implemented during the pandemic to help organizations that were forced to shut down or had a significant reduction in gross receipts.  Many organizations benefited from the credits as the program was intended; however, many ERC mills popped up claiming to help.  These ERC mills may file claims for organizations that do not meet the requirements and require an up front fee or a large percentage of the credit received for their assistance.   

Please read the following IRS News Release discussing the ERC, the proper way to make the claim, and what to be aware of – 

IRS Commissioner signals new phase of Employee Retention Credit work; with backlog eliminated, additional procedures will be put in place to deal with growing fraud risk

Businesses can typically continue to file claims for the credit until April 15, 2025 so if you haven't submitted a claim, and properly qualify, there is still time.  But be aware for ERC scams and make sure you meet the requirements.  If unsure, please contact your CPA.

Contributed by: Carrie Minnich, MAcct, CPA | Partner | DWD CPAs & Advisors