The IRS and tax professionals continue to see third parties aggressively promoting Employee Retention Credit schemes on radio and online.
Filers should carefully review the ERC guidelines before trying to claim the credit and be wary of offers promising tax savings that are too good to be true. Tax professionals are also reporting receiving undue pressure from clients to claim the ERC as a result of these scams.
These promoters push ineligible people to file a claim for the credit while charging the filer either large upfront fees or a fee that is contingent on the amount of their refund. Plus, the promoters may not inform taxpayers that they must reduce the wage deductions they claimed on the business’ federal income tax return by the amount of the credit.
The IRS has been warning about this scheme since last fall, but there continue to be attempts to claim the ERC made by ineligible filers during the 2023 tax filing season. This is a valuable credit for those who qualify but claiming it improperly could result in taxpayers having to repay the credit along with potential penalties and interest.
Qualifying for ERC
The ERC is a refundable tax credit for businesses who continued paying employees while shut down due to the pandemic or who had significant declines in gross receipts.
Eligible taxpayers can claim the ERC on an original or amended employment tax return during a qualifying period.
To be eligible for the ERC, employers must have:
Eligible employers can’t claim the ERC on wages that they reported as payroll costs in obtaining Paycheck Protection Program loan forgiveness or that they used to claim certain other tax credits.
Reporting ERC fraud
Employers can report illegal tax-related ERC claims and activities by submitting a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers and any supporting materials to the IRS Lead Development Center in the Office of Promoter Investigations. The fax telephone number and mailing address are on the form.
Employers should also report instances of fraud and IRS-related phishing attempts to the IRS at phishing@irs.gov and Treasury Inspector General for Tax Administration at 800-366-4484.
More information:
Filers should carefully review the ERC guidelines before trying to claim the credit and be wary of offers promising tax savings that are too good to be true. Tax professionals are also reporting receiving undue pressure from clients to claim the ERC as a result of these scams.
These promoters push ineligible people to file a claim for the credit while charging the filer either large upfront fees or a fee that is contingent on the amount of their refund. Plus, the promoters may not inform taxpayers that they must reduce the wage deductions they claimed on the business’ federal income tax return by the amount of the credit.
The IRS has been warning about this scheme since last fall, but there continue to be attempts to claim the ERC made by ineligible filers during the 2023 tax filing season. This is a valuable credit for those who qualify but claiming it improperly could result in taxpayers having to repay the credit along with potential penalties and interest.
Qualifying for ERC
The ERC is a refundable tax credit for businesses who continued paying employees while shut down due to the pandemic or who had significant declines in gross receipts.
Eligible taxpayers can claim the ERC on an original or amended employment tax return during a qualifying period.
To be eligible for the ERC, employers must have:
- sustained a full or partial suspension of operations due to orders from an appropriate governmental authority due to COVID-19 during 2020 or the first three quarters of 2021,
- experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021, or
- qualified as a recovery startup business for the third or fourth quarters of 2021.
Eligible employers can’t claim the ERC on wages that they reported as payroll costs in obtaining Paycheck Protection Program loan forgiveness or that they used to claim certain other tax credits.
Reporting ERC fraud
Employers can report illegal tax-related ERC claims and activities by submitting a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers and any supporting materials to the IRS Lead Development Center in the Office of Promoter Investigations. The fax telephone number and mailing address are on the form.
Employers should also report instances of fraud and IRS-related phishing attempts to the IRS at phishing@irs.gov and Treasury Inspector General for Tax Administration at 800-366-4484.
More information:
Someone you CAN Trust for This!
What is a “Typical Situation” people are in when they realize they need your help?
People and businesses facing high tax liabilities from personal earnings, operating business profits including real estate, other investment transactions including crypto currencies and the sale of a business or other hard assets.
What is something someone might say that would lead me to think of you?
• My taxes are too high.
• I want to sell, but the taxes will eat up a big share of my profit.
• I wish there was a way to reduce my crypto tax obligations.
What (Specifically) do you do?
B10 helps HNW individuals and businesses reduce their biggest expense: TAXES, by offering unique compliant tax strategies that include tax credits, cost segregation, property tax litigation, charitable giving, crypto Moontax service, and capital gains deferral, among others.
How do you do it?
Each strategy is assigned a dedicated expert team of CPAs and tax professionals that do all of the tedious analytical work and provide a final tax benefit report for the taxpayer and/or financial advisor.
Matching Ideas with Resources:
People and businesses facing high tax liabilities from personal earnings, operating business profits including real estate, other investment transactions including crypto currencies and the sale of a business or other hard assets.
What is something someone might say that would lead me to think of you?
• My taxes are too high.
• I want to sell, but the taxes will eat up a big share of my profit.
• I wish there was a way to reduce my crypto tax obligations.
What (Specifically) do you do?
B10 helps HNW individuals and businesses reduce their biggest expense: TAXES, by offering unique compliant tax strategies that include tax credits, cost segregation, property tax litigation, charitable giving, crypto Moontax service, and capital gains deferral, among others.
How do you do it?
Each strategy is assigned a dedicated expert team of CPAs and tax professionals that do all of the tedious analytical work and provide a final tax benefit report for the taxpayer and/or financial advisor.
Matching Ideas with Resources:
Pete Cooper
Company: B10 Capital
Email: petec@b10cap.com
Mobile: (847) 254-5500
https://www.linkedin.com/in/peter-cooper-il/
Company: B10 Capital
Email: petec@b10cap.com
Mobile: (847) 254-5500
https://www.linkedin.com/in/peter-cooper-il/
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