IRS Reiterates Warnings About Employee Retention Credit Scams

The IRS has issued renewed warnings about employee retention credit claims. This year, scams involving theERC have made the IRS' annual "Dirty Dozen" list. The IRS is warning taxpayers about promoters who are falsely claiming that they qualify for the ERC. The scams take on various forms. In general, the third party offers to prepare an amended return that either improperly determines that the business is eligible for the ERC or overstates the amount of the credit available. In some cases, third parties are advising that businesses may qualify for the ERC if general supply chain problems impacted the business’ operations. However, in reality, the business owner must be able to demonstrate that a governmental order issued by the U.S. federal government, state or locality impacted its critical suppliers’ operations—orders issued by foreign governments do not qualify. Business owners should closely examine the qualification requirements and their individual circumstances before filing an amended return to claim the ERC. For more information on the employee retention tax credit, visit Tax Facts Online. : Q .