Dear

The Employee Retention Tax Credit (ERTC) program is absolutely real. It is a program from COVID-19 to help small businesses by giving them a tax credit for payroll taxes  paid by the company in 2020 and 2021. I didn’t qualify for it. Lots of companies didn’t qualify and should never qualify. It’s big money though – up to $26,000 per employee.

There are a number of ERTC finder companies in business that advertise they can get basically anyone the ERTC money. They only want businesses with over 6 employees, because they take 15% of the ERTC collected and tiny companies won’t give them enough money. They advertise that they have gotten $3 billion for companies. When they take a company and apply for the ERTC, they may well doctor the numbers to make it work for the company. The company gets their ERTC money and the ERTC finder company gets its 15%.

The finder company doesn’t care what it said on the papers to qualify your company for ERTC. It will take years for the IRS to audit your company. The IRS will say that you fraudulently doctored the numbers or filed the application using fraud.

There is no IRS statute of limitations if they allege fraud. By the time the IRS comes knocking, the finder company is long out of business and will have declared bankruptcy for some reason. That means the company that got the ERTC money (your company) can never get their 15% back, yet your company will owe the IRS all the ERTC money plus penalties. The criminal charges for fraud will probably be waived if you pay all the money, interest, and penalties.

The IRS is fully aware of what is going on.  Each year the IRS puts out what it calls its “Dirty Dozen.”  You can only find the dirty dozen by going to IRS.gov and putting 2023 dirty dozen in the IRS website search bar.  The Dirty Dozen are the twelve top tax targets for that year.  You can see the Dirty Dozen for any year.  In 2023 the number one on the list reads:

Taxpayers should be aware of aggressive pitches from scammers who promote large refunds related to the Employee Retention Credit (ERC) [aka ERTC]. The warning follows blatant attempts by promoters to con ineligible people to claim the credit. The IRS highlighted these schemes from promoters who have been blasting ads on radio and the internet touting refunds involving Employee Retention Credits. These promotions can be based on inaccurate information related to eligibility for and computation of the credit. Additionally, some of these advertisements exist solely to collect the taxpayer's personally identifiable information in exchange for false promises. The scammers then use the information to conduct identity theft.

I have had a couple of students fall victim to this scam.  Please be careful.  You can go to https://youtu.be/sq9mzQGWV40 and see my in depth explanation of the ERTC.