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ERC Audit Services

ERC Risk Assessment / ERC Audit Support / ERC Tax Professional Representation

Protect Your Business From ERC Penalties

The IRS is actively pursuing suspicious ERC claims. Keep your business protected and prepared to successfully defend a potential ERC audit.

Understanding the ERC

In late March 2020, during a national lockdown and amid fears of widespread job losses, the CARES Act, one of the largest government aid packages in our country's history, was enacted. This legislation aimed to provide substantial financial support, particularly encouraging small businesses to retain their employees and sustain their payroll. The Employee Retention Credit (ERC) emerged as a component of the CARES Act, offering a complex tax credit with extensive accompanying documentation to establish eligibility.

Over the years, the ERC was initially overlooked due to its relative complexity compared to other emergency aid programs like the Paycheck Protection Program (PPP). However, in 2022 and 2023, it gained immense popularity, largely driven by aggressive marketing from "Tax Representation Firms." These firms made bold promises of quick and easy government money, often with inadequately trained sales representatives who relied on minimal or no supporting documentation from taxpayers. Consequently, a surge of questionable claims inundated the IRS, including outright fraudulent ones for companies that either had no employees or didn’t exist during the COVID pandemic. Many others filed with insufficient substantiation or overly liberal interpretations of the accompanying Notices. As a result, the IRS is actively engaged in auditing and pursuing those who have filed fraudulent or meritless claims.

The ERC Is Complex

Navigating the complex tax landscape, particularly concerning Employee Retention Credits (ERC) compliance, is crucial for experienced tax practitioners, as their professional standing depends on their license, reputation, and expertise. Performing an ERC Risk Assessment includes a thorough review of your ERC filing. We mitigate risk and ensure appropriate compliance with the IRS guidelines. We will review your filing, all the calculations performed, and all the supporting documentation the IRS requires you to provide.

Whether you've previously filed or haven't begun the process, we are here to help.

ERC Audit Support

Do You Need a Second Opinion on Your ERC Credit?

The Employee Retention Tax Credit (ERC or ERTC) provided under the CARES act provides much-needed support to businesses adversely affected by the pandemic. However, unscrupulous third-party tax credit preparers have taken advantage of many small business owners and pushed them into claiming ERC credits they may not have been eligible for, putting owners at risk of IRS audits and facing potentially serious financial consequences for their business.

At Jacobson Lawrence & Company, we can review your ERC claim and help you prepare for a potential ERC audit so that the IRS won't catch you off guard.

Why Do You Need ERC Risk Assessment?

Ever since the ERC became widely available for businesses to claim, there has been a boom in unscrupulous third-party preparers making overly promising claims about businesses' eligibility for ERC credit and leading clients to claim credits they may not have been eligible for. For this reason, the IRS has begun to audit many ERC claims.

If you are audited, you will need to defend your claim. A small business owner who claimed ERC credit they did not qualify for on the advice of one of these predatory preparers could potentially end up owing back taxes that can cause serious financial doom for the company.

Having an ERC risk assessment performed by a trusted tax professional will help you prepare for the possibility of an audit, defend your ERC claim, and offset the consequences of a potential ERC audit.

Aggressive ERC Credit Preparer May Include:

ERC Audit Notifications

You can (and should) have a tax professional represent you. To do so, prepare Form 2848 (Power of Attorney and Declaration of Representative) or Form 8821 (Tax Information Authorization) and send it to the IRS before your phone meeting.

Will you get audited for ERC?

The IRS has three years to audit most ERC claims, but it has five years to audit payroll returns with ERCs filed for the last two quarters of 2021. There is no deadline to audit returns when fraud is involved.

For more detailed information on the Employee Retention Credit, including positions, audits, and guidelines to avoid improper claims, we encourage you to visit the following official resources from the IRS:

If you have any questions or need assistance navigating these regulations or if you're unsure about how they apply to your situation, please don't hesitate to contact us. Our team is here to provide you with the support and guidance you need to ensure compliance and benefit from available credits properly.