This blog was written by Mike Bartholomew, Controller at Helpside.
The IRS recently issued a strong warning to employers about companies, who are seeking to take advantage of employers by aggressively marketing assistance with obtaining the Employee Retention Tax Credit (ERTC). According to the IRS, “Some third parties are taking improper positions related to taxpayer eligibility for and computation of the credit. These third parties often charge large upfront fees or a fee that is contingent on the amount of the refund and may not inform taxpayers that wage deductions claimed on the business’ federal income tax return must be reduced by the amount of the credit.”
The IRS cautions employers to be wary of companies advertising these services that sound too good to be true, with refund amounts exceeding your payroll amount for the period in question. Many of these come as direct solicitations via mail, email, or even text and promise large refunds without any actual knowledge of your company or your financials. Some of the mailers or emails appear to come from the IRS causing even more confusion for employers.
Ultimately, taxpayers are responsible for what they report on their tax returns and for correcting incorrect returns. Employers who fall prey to these schemes and improperly claim the ERTC may be required to repay the credit along with penalties and interest.
Employers can report instances of fraud to the Treasury Inspector General at 1-800-366-4484. If you have questions about the ERTC or the legitimacy of claims sent to you by a third party, please reach out to Helpside at email@example.com.