The IRS is on the hunt for businesses that mistakenly claimed the employee retention credit (ERC), a federal tax credit that arose during the pandemic to incentivize employers to continue paying employees during a shutdown. Usually, an erroneous credit is the result of business owners listening to unscrupulous promoters. The IRS says there are 7 signs that a claim may be incorrect: (1) too many quarters claimed, (2) reliance on government orders that don’t qualify, (3) too many employees/wrong calculations, (4) supply chain issues, (5), claims for too much of a tax period, (6) didn’t pay wages/business didn’t exist during the eligibility period, and (7) promotor said there was nothing to lose. If you claimed an ERC and think any of these signs apply to you, contact a tax pro so you can take corrective steps before the IRS catches up to you. #IdeaoftheDay
Barbara Weltman
Big Ideas for Small Business, Inc.
Subscribe and download our eBook, "150+ Tax Deductions for Small Business A to Z."
Footer
