Blog At A Glance:

Introduction

Frequently Asked Questions

Conclusion 

Sources and Citations

 

Introduction

The Employee Retention Credit (ERC) program, designed to help businesses retain employees during the COVID-19 pandemic, has seen significant developments in recent months. As a leading provider of Occams ERC Audit Advisory, we at Occams Advisory want to keep you informed and prepared. 

The IRS Audit Program Ramps Up 

The IRS has initiated an aggressive audit program to identify and address ineligible ERC claims. Our experience with two client audits highlights this focus. Both audits targeted Q3 of 2021, even though the credit hadn’t been paid yet. This suggests the IRS may revisit earlier quarters if discrepancies are found. Fortunately, for both our clients, the audits concluded successfully – one credit was paid, and the other is on its way. 

Navigating the Audit Process 

Our experience provides valuable insights: 

  • New Auditors: The auditors assigned to our clients were unfamiliar with the ERC program, indicating the IRS might be reassigning personnel from other areas. 
  • Focus on Calculations: Both audits centered on verifying calculations for qualification and credit amounts. This data-driven approach simplifies the process for everyone involved. 
  • Professionalism and Transparency: Our positive interactions with the auditors demonstrate an opportunity to collaborate in identifying and rectifying errors. We strongly encourage transparency throughout the process. 

Voluntary Disclosure Program: A Lifeline for Ineligible Claims 

The IRS offers a Voluntary Disclosure Program for organizations that received ERC funds they may not have qualified for. By March 22nd, 2024, organizations can return 80% of the funds and avoid penalties, interest, and amended tax returns (except for non-profit organizations deducting payroll against UBI). This program allows organizations to rectify mistakes without facing harsher consequences from a potential audit. 

Alternatives for Withdrawing Unprocessed Applications 

The IRS offers another option for organizations with unprocessed and un-audited ERC applications. A simple handwritten note stating “WITHDRAWN” on a copy of the 941X form, signed and dated, can be faxed to withdraw the application. 

The Fall of ERC Service Providers and the Importance of Trustworthy Advisors 

The recent news of a major ERC service provider laying off staff highlights the challenges within the industry. This company, known for charging hefty contingent fees, raises concerns about the quality of services offered. Choosing a trustworthy advisor like Occams Advisory is crucial. 

Occams ERC Audit Advisory: Your Partner in Risk Management 

The Occams ERC Audit Advisory goes beyond simply filing claims. We leverage our expertise in risk management to proactively identify and address potential issues. Our services encompass: 

  • Leading Risk Management Strategies: We deploy robust processes to minimize the risk of ineligible claims or incorrect claim amounts. 
  • ERC Claim Expertise: Our team possesses in-depth knowledge of the ERC program and its regulations. 
  • Audit Risk Management: We guide clients through every stage of the audit process, from initial contact to potential U.S. Tax Court petition. 
     

    Frequently Asked Questions

    My business received ERC funds, but I'm unsure if we were truly eligible. What should I do?
    If you have concerns about your eligibility, act quickly. The IRS Voluntary Disclosure Program allows you to return 80% of the funds and avoid penalties by March 22nd, 2024. Contact Occams Advisory to discuss your situation and explore your options.
    The IRS is auditing my ERC claim. What can I expect?

    Our experience suggests the IRS may be assigning new auditors unfamiliar with the program. The focus will likely be on verifying calculations for qualification and credit amounts. Transparency and clear communication are key. Occams Advisory can guide you through the audit process.

    I have an unprocessed ERC application I want to withdraw. How do I do that?

    Simply write “WITHDRAWN” on a copy of your 941X form, sign and date it, and fax it to the IRS.

    What makes Occams Advisory different from other ERC service providers?

    Occams Advisory goes beyond just filing claims. We take a risk-management approach, proactively identifying potential issues and ensuring your claim adheres to regulations. Our team has in-depth knowledge of the ERC program and can support you throughout the entire process, including potential audits.

     

    Conclusion:

    Don’t Wait Until It’s Too Late 

    With the March 22nd Voluntary Disclosure Program deadline approaching and the IRS pursuing audits, it’s critical to act. Contact Occams Advisory today to discuss your specific situation and explore how our Occams ERC Audit Advisory services can help you navigate the complexities of the ERC program. 

    Check out our website: www.occamsadvisory.com or Schedule a free consultation : Click here

     

    Sources and Citations:

    1: IRS Website – Employee Retention Credit 

    • This is the official IRS webpage for the ERC program. It provides details on eligibility, claiming the credit, and frequently asked questions. 
    • Citation: “Employee Retention Credit | Internal Revenue Service (.gov),” IRS (.gov), https://www.irs.gov/coronavirus/employee-retention-credit 

    2: IRS Website – Frequently Asked Questions about the Employee Retention Credit 

    3: Paychex – Employee Retention Tax Credit: Deadlines, Eligibility, and What to Know to Apply 

    Disclaimer

    This case study is for informational purposes only and should not be considered tax advice. Always consult with a qualified tax professional for guidance on claiming the R&D tax credit.