The terrain of Employee Retention Credit (ERC) claims has been shifting dramatically, and business owners must keep pace with these changes. As the IRS unveiled a major initiative to clamp down on ERC claims and reject tens of thousands of high risk ERC claims, consequences abound for owners of businesses who have submitted claims.
There have been countless changes to the credit since it was initially passed under the CARES Act, and ERC is far more complicated than unscrupulous preparers would like you to believe. Engaging a tax professional with a background in ERC claims is essential.
The implications of this crackdown extend far beyond simple claim denials. Taxpayers need to be acutely aware that overclaims can result in retroactive assessments of interest and penalties. The IRS has a range of punitive measures for those found to have improperly received the ERC. These include the Accuracy Related Penalty, generally 20 percent of the underpayment, and the Failure to Pay Penalty, which begins to accrue at 0.5 percent, 1 percent after receiving a Notice of Intent to Levy, per month, up to 25 percent of the unpaid tax.
Moreover, knowing that your claim has been thoroughly vetted by a tax professional who is well versed in ERC can alleviate the stress of potential IRS scrutiny. Further, if the tax professional finds an issue with an earlier filing, it allows you time to proactively address and correct the issue, often before the IRS discovers it. This proactive approach cannot only save you from potential penalties but also demonstrate your commitment to compliance, which can be beneficial in any future interactions with the IRS.
At Azarvand Tax Law, we provide these crucial second opinions for business owners. Our team of experienced tax professionals not only understands the unique challenges faced by different industries but also the complexities of ERC claims. We can review your claim thoroughly, identify any potential issues, and help you take corrective action if necessary, giving you the confidence and security you need. Do not leave the health of your ERC claim to chance.
Contact Azarvand Tax Law at 410-698-4005 or book a free consultation online at ERCAuditTaxAttorneys.com.
A version of this article was published in Salon Today .
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