It’s essential to be diligent about trending ERC scams. IRS legislation passed in response to the Employee Retention Credit has drawn many suspicious players eager to get a portion of the tax credit intended for eligible employers and small/medium-sized businesses.
The newest are so-called ERTC firms that promise owners massive, backdated tax benefits via tax credit for retaining employees called the Employee Retention Tax Credit (ERTC) also known as Employee Retention Credit (ERC).
ERTC and the CARES Act
Originally introduced as a part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Employee Retention Tax Credit is a refundable tax credit that assists small and medium-sized businesses in continuing to pay their working staff throughout the COVID-19 pandemic.
Since the eligibility regulations of the ERTC program have undergone several modifications year by year, Employee Retention Credit scams are on the rise, stealing money and putting businesses in jeopardy of IRS audits.
Scams involving tax refunds are a sort of financial fraud in which scammers pose as employees of the Internal Revenue Service (IRS) or other officials of the government to deceive victims into providing them with personal information or allowing them access to their tax refunds.
Once the scammers obtain the information, they are in a position to do other fraudulent activities, possibly identity theft.
For instance, scammers may collect payments by pretending to be the Internal Revenue Service (IRS) or by charging for services that do not exist. Additionally, they can receive a return from the government on your behalf by filing claims in your name.
Sometimes, they use or sell your personal information to commit identity theft concerning taxes via the Dark Web. So, the question is, what are some of the common ERTC scams, and how can you avoid being a victim? Let’s find out.
What Are Employee Retention Credit Scams?
Scams involving tax refunds are a sort of financial fraud in which scammers pose as employees of the Internal Revenue Service (IRS) or other officials of the government to deceive victims into providing them with personal information or allowing them access to their tax refunds.
Once the scammers obtain the information, they are in a position to do other fraudulent activities, possibly identity theft.
For instance, scammers may collect payments by pretending to be the Internal Revenue Service (IRS) or by charging for services that do not exist. Additionally, they can receive a return from the government on your behalf by filing claims in your name.
Sometimes, they use or sell your personal information to commit identity theft concerning taxes via the Dark Web. So, the question is, what are some of the common ERTC scams, and how can you avoid being a victim? Let’s find out.
Common ERTC Scams That You Should Be Aware Of
ERTC scams have rapidly become one of the most prevalent methods for scammers to steal victims’ money and identities. To their benefit, these so-called firms take advantage of the victims’ stress when dealing with the Internal Revenue Service (IRS). Post-COVID-19, the situation is just getting worse.
According to Internal Revenue Service (IRS), identity theft, IRS related phishing attempts and fraudulent claims for tax refunds saw a 91% spike [*] in 2021. Here’s a list of some common ERTC scams to be aware of.
- Emails that seem legitimate but attempt to collect personal information.
- Unknown phone calls or direct solicitations requesting a sum of payment for taxes.
- Discovering an amended tax return that was filed under your legal name.
- Claiming that your Tax ID number has been suspended.
- Preparers of payroll tax returns who don’t exist but take your money.
- Inform taxpayers asking for additional tax credit forms to be filled out.
- IRS shows incorrect ERC claims and you are entitled to greater tax credits.
- Calls from false government agency other than the Tax Administration.
- Claiming that you have an overdue payment on your account.
- Demanding ERC claim payments in the form of gift cards or crypto.
- Requests for a W-8BEN form by the firm without prior notice.
- Attempt to have business pay upfront fees before any services are rendered.
Make them Explain Why They Are a Reputable company to Claim the Employee Retention Credit
When ERC programs promise taxpayer eligibility for the ERC, they must clearly outline their credentials and previous completion of amended income tax return. Some useful questions to ask include:
- Are there testimonials or evidence that he/she can provide if needed?
- Has their staff been a part of the IRS or a specific ERC company?
- Is the staff trained in gross receipts, qualified wages, eligibility requirements, partial suspension, and significant declines?
- How do I compare the decline in gross receipts and wages paid?
- How do you know they are a legitimate company?
Most ERC scammers will disappear quickly once you reveal their ERC scam.
Does the ERC Program Offer Internal Revenue Service Audit Protection
Asking whether companies offer audit protection can be a great way of avoiding fraud. Audit protection relates to auditing your company in case of a revocation of credit. So asking about audit protection is a great way to ensure you deal with an honest business to avoid scamming.
Things to Consider When Choosing ERTC Consultants
With the new deadline to apply for the ERTC extended from March 12, 2023, to April 15, 2024, scammers are out in full force to put businesses in legal jeopardy.
Before choosing an ERTC firm, provide an extra layer of safety by ensuring that all your taxes are submitted on time.
If the company is aiding you with an amended employment tax return using Form 941 X, be sure they prove your taxpayer eligibility before you hire them to complete the work.
On the other hand, vet the firm properly and stay away from those who claim they can maximize your tax return.
Also be sure the amended income tax return payment is delivered to your bank, not anywhere else.
For the utmost peace of mind, only work with legitimate companies.
FTCO ERC Experts– ERTC Tax Consultants
We believe every local business owner should be allowed to get the maximum credit available through the Internal Revenue Service (IRS) without any financial risk down the road. Integrity is the cornerstone of our business culture, having been instilled in the company since its inception.
We frown on Employee Retention Credit fraud and our mission is to get businesses the tax savings they deserve.
Our clients and business partners put their faith in us to get the compensation that is rightfully theirs, and we do not take that faith for granted. To us, integrity means:
- We follow IRS guidelines very closely to ensure there are no repercussions.
- If we cannot claim ERC credit, you will not be required to pay any fees.
- We are entirely supported by the success fees, which means no hidden costs.
- We maintain direct billing procedures with no upfront fees. You pay us after you get your tax credits.
- We provide full audit protection and will refund any credits ruled invalid.
- We don’t demand payment until the Internal Revenue Service reimburses you.
- We deliver a detailed report explaining the calculation of the credit you earned.
- We inform taxpayers of the evidence for ERC eligibility business credit.
- We successfully negotiate your way to a credit line without any associated risks.
Remember, with Employment Retention Credit claims in full swing, the tax credit industry is in the headlines again, revealing the unethical billing practices of various ERTC firms.
We are distraught to find that deserving businesses have been cheated out of the credits they were entitled to receive from the government due to fraudulent sales promises, unclear contracts, improperly managed files, and exorbitant fees. Now that you know how we work, no don’t need to go elsewhere.
Federal Tax Credits ERC to Help Claim Your Employee Retention Credit Today
Do not allow the complexity of the process and the amount of paperwork to prohibit your business from taking advantage of the Employee Retention Tax Credit. Contact FTCO ERC experts by filling out a contact form or call us at 360 641-7709 to get a comprehensive review of the tax credits available to you.
Thank you for taking the time to read this article. We hope it helped you navigate the ERTC process. If you have any questions or want a free ERTC qualification check, don’t hesitate to contact us.
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Thank you for taking the time to read this article. We hope it helped you navigate the ERTC process. If you have any questions or want a free ERTC qualification check, please contact us.