Beware (Again!) of Employee Retention Credit Scams

We have discussed this in the newsletter before, but recently the scamming has ramped up and new warnings are being issued. The IRS is warning small businesses and tax-exempt organizations to steer clear of scammers promising big money with the Employee Retention Credit (ERC). Misinformation is all over radio, TV, social media and the internet. You probably have gotten emails, mail, and/or phone calls about it. These scammers lure you with promises of fast money and an "easy application process." At the bottom of this page is part of an actual scam letter to give you an idea of what you may receive or have received.

These scammers may lie about your eligibility. They will probably charge a big fee/percentage of the credit you receive to "help" you claim the credit. They line their pockets and leave you with big tax issues because if you claim the credit when you don't qualify for it, YOU have to pay it back, possibly with penalties and interest! Oftentimes if the employer tries to contact the company again after the ERC has been issued, the company has already disappeared.

The ERC needs to be claimed on a federal tax return. Tax return preparers, like PPG Partners, have been warned by the IRS that they should not amend tax returns for the ERC unless they are in agreement with the ERC amount claimed. Otherwise, the tax preparers themselves can be charged with fraud.>

If you claim the credit, make sure you qualify. Be wary of any company trying to get you large amounts of money, and quickly. If PPG Partners does your business’s accounting, we will have already done the appropriate analysis and calculations to determine whether and for how much ERC you qualify. You can also visit IRS.gov/erc to find details about eligibility and how to claim the credit.