The Employee Retention Credit continues to be the subject of aggressive broadcast advertising, direct mail solicitations, and online promotions, according to the IRS and tax professionals. Although the credit exists, aggressive promoters grossly exaggerate and misrepresent who is eligible for the credits.

Regarding these claims, the IRS has intensified audit and criminal investigation work. Before submitting an application, businesses, tax-exempt organisations, and others who are interested in this credit should carefully review the program’s official requirements. The IRS will take further action against anyone who fraudulently claims the credit.

It is legal to claim the Employee Retention Credit (ERC), also known as the Employee Retention Tax Credit or ERTC. Many companies sincerely submit applications for the pandemic-era credit. ERC claims take a long time to process because they involve amended tax returns, so the IRS has increased staff to handle them.

It is legal to claim the Employee Retention Credit (ERC), also known as the Employee Retention Tax Credit or ERTC. Many companies sincerely submit applications for the pandemic-era credit. ERC claims take a long time to process because they involve amended tax returns, so the IRS has increased staff to handle them.

Since last year, the IRS has been warning the public about aggressive ERC scams, and this year, it included one of these schemes on its list of the “Dirty Dozen” tax scams to be on the lookout for.

In many ways, this is still a top priority, and the IRS is doing more compliance work involving ERC. The IRS’s Criminal Investigation division is working to find fraud and those who promote fraudulent claims, and trained auditors are looking at ERC claims that pose the greatest risk.

How individuals and organisations can safeguard themselves:

• Work with a reputable tax expert. The IRS advises people not to rely on the advice of those promoting these credits, and encourages eligible employers who need assistance claiming the credit to work with a reputable tax expert. Promoters who are promoting this have a financial incentive to do so; they frequently have no interest in the applicants’ best interests.
• If you don’t think you are actually eligible for this credit, don’t apply. IRS.gov has information about the credit, and once more, a reputable tax professional, not someone who is promoting the credit, can offer important professional advice on the ERC.