Employee Retention Credit Audits_ How To Prepare and Protect Your Business

The IRS announced on September 14 that hundreds of criminal cases involving potentially fraudulent Employee Retention Credit claims are being worked on. Thousands of ERC claims have already been referred for audit. If you haven’t yet applied for the ERC and are nervous about preparing and protecting your business against a possible ERC audit, as a law firm that has already handled many ERC applications for businesses, Dayes Law Firm has some advice. 

Preparing For and Protecting Against an ERC Audit

There is always a chance that a business applying for the Employee Retention Credit could end up dealing with an ERC audit from the IRS, even if they make their best effort to avoid it. In July, the IRS shifted its focus regarding ERC processing to scrutinizing claims for compliance concerns, and even business owners who are careful about their applications might get caught in the crossfire. 

But there are ways you can prepare for and protect your business against an ERC audit. If you receive a request for information in the form of documents you have to send the agency to verify your ERC claim, you’ll want to already have certain records ready to send to the IRS to prove your claim’s legitimacy, like records of significant decline in gross receipts for your business or information regarding your full-time equivalent employees and their qualified wages.

The most important thing is to already have all of your claim information documented and ready to be pulled up should the ERC try to audit your claim. Keeping all of this information organized could make the process go much more smoothly and prove that your claim is legitimate to the best of your knowledge. 

If you have things like payroll records and employment tax returns organized and available to send to the IRS in the case of a request for information, that’s less work you’ll have to do should such a request be made. And if you’ve double and triple-checked all that information for accuracy and avoided any mistakes, you’re more likely to avoid an IRS ERC audit in the first place. 

Any discrepancies in your Employee Retention Credit paperwork could end up being a red flag to the IRS. If you want to be absolutely sure you’ve protected your business against a potential ERC audit, working with a team of trusted tax professionals may be the way to go. 

Working with Dayes Law Firm on the ERC

Dayes Law Firm can assist you with your Employee Retention Credit claim to help you avoid being audited by the IRS. We know the ERC inside and out and have successfully helped many businesses claim over $25 million in funds for ERC tax credit claims so far. 

We’re also very proud to say we can help defend you if you find yourself audited by the IRS. We are committed to standing behind refunds we believe are due to your business – meaning we will defend any businesses we’ve assisted with an ERC audit or if there is ever a request for an audit in the future.

Dates Law Firm offers a free consultation on Employee Retention Credit audit questions, or on any ERC questions or concerns you may have. Please feel free to contact us today for a no-obligation consultation and see how our team can work with you on your ERC application or help you defend your business against an ERC audit.