Advantage Accounting & Tax, a leading accounting firm specializing in Employee Retention Credit (ERC) claims, commends the recent decision by the IRS to temporarily halt the acceptance of new ERC applications. This move, announced by the IRS last week (Sept. 14), aims to address growing concerns regarding fraudulent claims within the ERC program.
The IRS‘s decision was driven by a need to curb fraudulent activities related to the ERC program. The decision to pause new applications, effective immediately, was a response to the significant uptick in filings, with an astounding 600,000 applications submitted in the last 90 days alone. This spike raised red flags, as it indicated a potential surge in fraudulent claims that could undermine the program’s integrity.
Advantage Accounting & Tax CEO Kash Sharfi explained that the IRS‘s primary focus is on addressing fraudulent applications, “Some unscrupulous actors have been using questionable tactics, including submitting incomplete or false documentation, misrepresenting employee counts, and taking advantage of ‘no-document-required’ applications offered by certain promoters or ERC mills.”
The Employee Retention Credit has proven to be a lifeline for small businesses. This credit, introduced as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in response to the COVID-19 pandemic, was designed to incentivize businesses to retain their employees and prevent layoffs. It achieves this by providing a refundable tax credit against certain employment taxes, making it easier for businesses to continue operations while safeguarding jobs.
The IRS has emphasized the importance of working with trusted tax Professionals” to ensure that legitimate businesses receive the ERC funds they deserve. While the IRS acknowledges the program’s value for eligible companies, the IRS stated working with the right professional who actually understands the complex ERC rules is crucial and “not a promoter or marketer hustling to get a hefty contingency fee.”
The IRS intends to add a new safety net onto the ERC program to focus on fraudulent claims and scammers taking advantage of taxpayers.
Advantage Accounting supports the IRS‘s efforts to maintain the integrity of the ERC program. Sharfi noted that their firm, along with many other reputable CPA firms, adheres to a rigorous and painstaking process to ensure the accuracy of ERC applications, regardless of the application’s size.
Advantage Accounting believes that it is crucial for businesses to both be aware of the importance of maintaining trust in the ERC program and to be informed about the temporary halt in ERC applications and is working with its customers to ensure existing applications are being processed and customers who haven’t filed yet have everything in order when the claim process opens up again in January.
Sharfi stressed, “This pause should not deter eligible companies from applying when the IRS resumes processing applications on January 1, 2024.”
He added that he and his team understand the uncertainty and anxiety that this news may have caused among small business owners. The firm is committed to providing guidance and support to its clients during this time, assuring them that legitimate claims will continue to be processed once the pause is lifted.
“While there is a significant number of small businesses that have not yet applied for ERC despite being eligible, Advantage Accounting & Tax is hopeful that this pause will allow them to reconsider and take advantage of the program when it reopens. The ERC program remains a lifeline for small businesses affected by the pandemic and encourages eligible companies not to be discouraged by recent developments,” Sharfi said.
As Advantage Accounting and its clients navigate these changes, the firm is closely monitoring the situation and will provide further updates as necessary. They remain committed to helping legitimate businesses access the financial relief they deserve and will continue to advocate for the responsible use of the ERC program.
About Advantage Accounting & Tax
Advantage Accounting is a leading CPA firm specializing in Employee Retention Credit (ERC) claims. With a commitment to accuracy, compliance, and ethical practices, Advantage Accounting assists businesses in accessing the financial relief provided by the ERC program.
