After a temporary moratorium on new Employee Retention Tax Credit (ERTC/ERC) claims through the end of 2023, the IRS may not be dealing quickly with a considerable number of businesses trying to get applications in before the first, soon approaching ERTC deadline. But business owners don’t want to move too quickly, because those claims might face tougher scrutiny, and the last thing you want to deal with is an IRS ERTC audit. 

How to Get Ahead of Stricter ERTC Auditing Practices

In July 2023, IRS Commissioner Danny Werfel said the IRS was shifting away from clearing the backlog of valid ERTC claims and that the agency was approaching “increased audit and criminal investigation work on these claims” with heightened aggression.

In mid-September last year, the IRS also announced “an immediate moratorium through at least the end of the year on processing new claims for the pandemic-era relief program” as a result of increased fraud worries. Werfel said in the announcement, “The IRS is increasingly alarmed about honest small business owners being scammed by unscrupulous actors, and we could no longer tolerate growing evidence of questionable claims pouring in.”

That pause has now ended, but if you haven’t yet turned in your application on behalf of your business, you’re going to want to be very careful about the accuracy of your claim when you do so. Fortunately, there are ways to stay ahead of stricter ERTC auditing practices from the IRS. 

For one thing, business owners might want to consider working with a team of tax professionals on their ERTC claim to avoid issues with the IRS later. A tax attorney can help you with every step of the claims process and make sure you have all of the documentation the IRS will want and likely has the resources to verify all of that information before it’s ever sent to the agency. 

Tax professionals can also help you if you do end up dealing with an ERTC audit – or at least, a reputable one should offer a strong audit defense, as Dayes Law Firm does. Hopefully, however, by being diligent about the information you send as part of your claim in the first place, stricter ERTC auditing practices won’t get you caught up in a messy IRS audit. 

You can, of course, be careful about your application without the help of a tax professional. If you’re willing to put in the time to make sure you track down every piece of documentation needed for your Employee Retention Tax Credit claim, to double-check it, to calculate eligible wages as needed for your claim, and more, then you might have a chance of avoiding scrutiny from the federal agency. 

However, even IRS Commissioner Werfel suggested in that September announcement that when it comes to claiming the ERTC, “businesses should seek out a trusted tax professional who actually understands the complex ERC rules.” 

Work with Dayes Law Firm

To save a whole lot of time and potential headaches contending with stricter ERTC auditing practices, as an employer, you should consider working with tax professionals like the ones at Dayes Law Firm. We can help you stay ahead of possibly being audited by the IRS, or assist you with a strong audit defense if there is ever a request for an audit in the future.

Our team has extensive experience helping businesses claim the Employee Retention Tax Credit, and we’d be more than happy to help you prepare an application on behalf of your business, too. Please feel free to contact us at your earliest convenience at (800) 503-2000 for a free, no-obligation consultation today!