Today, Optima Tax Relief’s Lead Tax Attorney, Phil Hwang, discusses the Employee Retention Credit (ERC), including the rise in scams surrounding the credit.
The Employee Retention Credit (ERC) is a tax credit introduced in response to COVID-19 to provide financial relief to businesses that have experienced economic hardships due to the pandemic. It encourages employers to retain their employees on payroll by offering a refundable tax credit against certain employment taxes.
Lately, there has been a rise in advertisements for the ERC by third parties claiming that they can help businesses obtain the credit easily for a fee. The issue at hand is that not all of these businesses actually qualify, and these third parties knowingly proceed with the application, leaving the businesses exposed to potential stressful IRS audits that can result in a hefty tax bills.
Before trusting any of these third parties, taxpayers should be sure to do their own research about the eligibility requirements. In addition, they should reach out to a trusted tax professional to give a second opinion. If you have already been duped by an ERC scammer, you may feel more at ease letting a professional team of tax experts handle the IRS for you. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations.
As of September 14, 2023, the IRS has halted new Employee Retention Credit processing due to the astounding amount of fraudulent applications. The halt is set to last at least until the end of 2023 and could be extended longer if necessary.
Don’t miss next week’s episode where Phil will discuss marriage and taxes. See you next Friday!
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