Q&A of the Week August 14, 2024

Question

What warning signs should I look for to correctly do my Employee Retention Credit(ERC) claim?

Answer

The IRS has recently shared some new warning signs to look out for in false employee retention credit claims. 

They compiled this list from the common issues they have seen after analyzing recent claims.

The IRS issued today’s five new warning signs to give businesses and tax professionals additional time to prepare for an upcoming announcement involving new steps being taken to counter improper ERC claims.

Here are the areas the warning signs cover:

• Essential businesses during the pandemic that could fully operate and didn’t have a decline in gross receipts.

• Business unable to support how a government order fully or partially suspended business operations.

• Business unable to support how a government order fully or partially suspended business operations.

• Business using wages already used for Paycheck Protection Program loan forgiveness.

• Large employers claiming wages for employees who provided services.

Read in more detail here: https://www.irs.gov/newsroom/irs-shares-more-warning-signs-of-incorrect-claims-for-the-employee-retention-credit-urges-businesses-to-proactively-resolve-erroneous-claims-to-avoid-penalties-interest-audit