The Internal Revenue Service (IRS) has issued a repeated warning on claims for the Employee Retention Credit: erroneous claims create compliance risk for individuals and corporations 2023 .
Because promoters are still encouraging individuals who are not qualified to file tax returns to do so, the Internal Revenue Service has issued a fresh warning and issued a renewed call for people to carefully review the guidelines for the Employee Retention Credit (ERC) before attempting to claim the credit.
Warning: Review the ERC guidelines.
The Internal Revenue Service and several tax experts have been aware of certain third parties’ persistence in actively promoting various ERC frauds via radio and online platforms. Some promoters demand a significant payment upfront, while others charge a fee that is proportional to the amount of money made. It is against the law for promoters to inform clients that the credit needs to be deducted from wage deductions before they are included in the federal income tax return of the company.
Acting Internal Revenue Service (IRS) Commissioner Doug O’Donnell stated that while “this is a legal credit that has provided a financial lifeline to millions of businesses,” there are still promoters who aggressively mislead people and businesses into thinking they may claim these credits. People should pay attention to the counsel of their tax preparer if he or she disputes the veracity of an employee retention credit claim. The Internal Revenue Service (IRS) is actively auditing and initiating criminal investigations into these bogus claims. Before making such a bold statement, people should stop and ponder.”
Warning issued by Internal Revenue Service
Even though the Internal Revenue Service (IRS) has been issuing warnings about this scam since the previous fall, people are still making claims to be eligible for the ERC for the 2023 tax year. According to reports from certified public accountants, they continue to receive threats and harassment from clients who falsely seek tax benefits.
The Office of Professional Responsibility of the Internal Revenue Service (IRS) is working diligently on new criteria for professionals working in the tax business. Individuals and companies can steer clear of this con by refraining from filing fraudulent claims in the first place. An amended income tax return must be filed to adjust any overstated wage deduction if the company previously filed a tax return deducting qualified wages before filing an employment tax return claiming the credit.
Companies should be wary of promotions and cold calls that promise substantial tax savings but fail to deliver on their promises. Each taxpayer is solely responsible for the accuracy of the data included in their tax forms. Taxpayers may be liable to return the ERC plus penalties and interest if they file a fraudulent claim for the credit.
All about ERC
The Emergency Response Credit (ERC) is a tax credit that allows for the reimbursement of taxes paid by businesses that continued to pay their employees despite being closed during the COVID-19 outbreak (March 13, 2020-December 31, 2021). Taxpayers who meet the requirements can make a claim for the ERC on either their initial or updated Form 941 (Employment Tax Return) for a tax year that begins during the range of dates that has been defined.
Eligibility for the ERC
Incurred full or partial closure as a result of government directives restricting business, travel, or gatherings in response to COVID-19 in 2020 or the first three quarters of 2021.
had a substantial reduction in gross receipts in 2020 or in the first three quarters of 2021; or
classified as a recovery startup business for the third or fourth quarters of 2021.
As a reminder, only recovery-starting enterprises are eligible for the ERC in the fourth quarter of 2021. Additionally, for any quarter, eligible firms cannot claim the ERC on wages that were reported as payroll expenditures in achieving PPP loan forgiveness or that were used to claim certain other tax credits.
FOR MORE ARTICLES PLEASE VISIT THE BELOW LINK
PPP Scammer Bites The Dust After Flaunting Lamborghini – Is It a Scam?
The views and opinions expressed in these articles are those of the source IsItaScam.com and do not necessarily reflect the official position of ‘Holy Smoke!,’ which shall not be held liable for any inaccuracies presented. The information provided within this article is for general informational purposes only. While we try to keep the information up-to-date and correct, there are no representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability or availability of the information in this article for any purpose.
This article is syndicated automatically through a third-party agency from IsItaScam.com.
To view the original article at IsItaScam.com, you can visit https://www.isitascam.com/ny/the-internal-revenue-service-irs/.
