Employee Retention Credit (ERC) – Beware of Third-Party Schemes

Dvorak Law Group, LLC has advised clients across the country regarding Employee Retention Credit (ERC) guidelines and potential eligibility. During the process, Dvorak Law Group assists clients by reviewing governmental orders and qualifications, as well as analyzing facts and circumstances specific to each business.

Unfortunately, due to the ERC’s potential to provide businesses with significant financial relief, third-party ERC schemes and promoters have preyed on businesses. Unlike the assistance Dvorak Law Group provides, third-party schemes and promoters have been known to push clients to file claims without adequate analysis of the business’s eligibility for ERC under ERC guidelines.

Businesses should exercise caution before signing agreements or using the services of any third-party ERC promoters. A few red flags include, but are not limited to:

the third-party promoter failing to ask in depth questions about the business,
lack of due diligence or review of the company’s documentation,
charging excessive fees, and/or the expected credit seeming too good to be true.

A business should be reminded that once a 941-X form is filed, it cannot be withdrawn. However, if a business falls victim to an ERC scheme, filing an amended 941-X form based on an in-depth analysis on ERC eligibility may provide a good faith basis to help avoid penalties by the IRS.

If your business engaged with a third-party ERC promoter and you have any concerns about what has transpired to date, the attorneys at Dvorak Law Group may be able to assist you with your matter.

Dave Mayer