Staying Vigilant: Employee Retention Credit Scams

On March 20th, the Internal Revenue Service (IRS) issued a press release warning taxpayers about the 2023 dirty dozen tax scams. One of which is related to Employee Retention Credit Scams (ERCs). According to the IRS, aggressive promoters are making offers that are too good to be true, luring taxpayers into fraudulent schemes to claim these credits.

What is the ERC?

In March 2020 the Coronavirus Aid, Relief, and Economic Security (CARES) Act first introduced ERC. The intention was to provide financial relief to businesses affected by the COVID-19 pandemic. The credit encouraged employers to keep their employees on the payroll during the pandemic by providing them with a tax credit.

However, scammers have now started to target the ERC, claiming that they can help businesses claim the credits even if they are not eligible. These Employee Retention Credit scams or fraudulent schemes can take many forms. This includes unsolicited phone calls, phishing emails, and social media scams.

How to avoid Employee Retention Credit Scams

The IRS has warned that taxpayers should be cautious of any offers that seem too good to be true. In addition, always be careful not to share any sensitive information with anyone claiming to be able to help claim the ERC. Because of this, the agency has also stated that it will increase its scrutiny of ERC claims in 2023 to prevent fraudulent claims.

Taxpayers should be aware of the risks of ERC scams and take steps to protect themselves from fraudulent schemes. By staying vigilant and reporting any suspicious activity to the IRS, businesses can avoid falling victim to these scams. This can also ensure that they receive legitimate relief through the ERC program.

To read the full IRS Press release, please visit this link

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The above article only intends to provide general financial information. It is based on open-source facts; it is not designed to provide specific advice or recommendations for any individual. It does not give personalized tax, financial, or other business and professional advice. Before taking any form of action, you should consult a financial professional who understands your particular situation. CKH Group will not be held liable for any harm/errors/claims arising from the articles. Whilst every effort has been taken to ensure the accuracy of the contents we will not be held accountable for any changes that are beyond our control.

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