Can Tax Professionals Protect Businesses from Fraud Accusations?

The IRS has been cracking down on fraudulent Employee Retention Tax Credit applications in recent months – even instances in which the business owner may not have known or intended for the claim to be fraudulent but was led astray by a dishonest third-party promoter. A reputable tax professional can actually help businesses be protected from fraud accusations, including when it comes to claiming tax credits. 

How Can Tax Professionals Protect Businesses from ERTC Fraud Accusations? 

In November 2023, the Financial Crimes Enforcement Network (FinCEN), closely coordinating with the Internal Revenue Service Criminal Investigation (CI), released an alert to financial institutions on fraud schemes related to the COVID-19 Employee Retention Tax Credit, also referred to as the ERTC or ERC.

As of November 22, CI had identified “ongoing fraud and scams related to the ERC that, to date, have resulted in 323 investigations involving more than $2.8 billion of potentially fraudulent ERC claims throughout tax years 2020, 2021, 2022, and 2023.” That’s a lot of money caught up in fraud accusations, and it’s possible that not all of it was intentional. 

In a previous news release, IRS Commissioner Danny Werfel shared, “While the credit has provided a financial lifeline to millions of businesses, there are promoters misleading people and businesses into thinking they can claim these credits.” Sadly, if businesses that aren’t actually eligible to claim the ERTC do so anyway with this dubious guidance, business owners are the ones left dealing with the consequences if the claim is found to be fraudulent. 

This increase in ERTC fraud has led the IRS to begin putting claims through a comprehensive compliance review process. Claims that are currently being evaluated or applications turned in before ERTC deadlines may face heightened scrutiny from the federal agency. How can tax professionals help protect businesses from fraud accusations, specifically in cases involving the ERTC? 

To avoid accusations of fraud and potentially high fees and penalties, tax professionals can help you gather the right information the IRS is looking for in an ERTC claim. They can help you put together the exact documentation needed to support your application and verify all of that information before it ever gets sent to the IRS. 

Tax professionals already know how to deal with the IRS better than a business owner just trying to keep their business afloat. Tax attorneys know the ins and outs of tax credit programs like the ERTC and will know how to help you avoid pitfalls that could lead to an accusation of fraud. 

Most importantly, if you are accused of fraud regarding your ERTC claim, a reputable tax professional can help. At Dayes Law Firm, for instance, we provide a strong audit defense of the ERTC applications we assist with, and will defend our work if necessary. 

Working with Dayes Law Firm

If you want the added peace of mind that comes with working with a tax professional on the Employee Retention Tax Credit, Dayes Law Firm is the ERTC partner for you.  

Not only can we help with your ERTC claim process from start to finish, but our team also stands ready to assist you if your claim is accused of being fraudulent. Our clients have already received over $25 million in funds for Employee Retention Tax Credit funds, so we have a proven record of success when it comes to assisting businesses with accurate ERTC applications. 

Please call us today at 800.503.2000 to learn more about our free, no-obligation consultation and to see how we can help you and your business with the ERTC. We look forward to hearing from you and to helping you claim the ERTC funds you’re entitled to receive!