The IRS has issued warnings to employers about improper Employee Retention Credit (ERC) claims and third-party advisers who charge hefty upfront fees or fees contingent on the amount of the refund. The ERC is a refundable tax credit enacted in 2020 for eligible businesses who continued paying employees during a COVID-19 shutdown or experienced significant declines in gross receipts.
Tax professionals must meet their Circular 230 professional responsibilities to ensure they are meeting the standards required to prepare and sign original tax returns, amended returns, or claims for refund relating to these credits. The Circular 230 provisions include due diligence, accuracy, and standards for tax returns and other documents, and written advice. Practitioners must exercise due diligence to ascertain the information necessary to determine clients’ eligibility for the ERC and to claim the proper amount of the ERC on the clients’ returns. If a practitioner has reason to believe that a client's excessive ERC claim is due to erroneous or improper advice, the practitioner should advise the client of the overstated claim and any additional tax and penalties that could apply and competently assist the client in correcting or mitigating the problem.
Read the complete IRS guidance to tax professionals here:
ERT Credit's adherence to the IRS guidance above has been a top priority for the company since its inception. With over 1400 clients served in the past 2 years, ERT Credit has maintained its commitment to following Circular 230's provisions on due diligence, accuracy, and standards for tax returns and other documents. Moreover, the company does not engage in outbound marketing or solicitation of business, relying solely on referrals from accounting firms and legal advisors. ERT Credit also follows a strict conservative eligibility process, ensuring that its clients meet the necessary criteria to claim the ERC accurately. This approach underscores ERT Credit's commitment to ethical and responsible conduct in its service offerings.