What CPAs Need to Know about Employee Retention Credit Fraud: Certified Public Accountant

ABSTRACT

According to the IRS, many of these solicitations are offering credits that are "too good to be true"- in some cases, they are downright fraudulent. Eligible employers can still claim the credit currently by filing an amended payroll tax return (Form 941-X) for each quarter during which they paid qualifying wages. Because amended payroll returns may be filed up to three years alfer the deadline for the original returns, employers will be able to claim ERC credits into 2025. [...]during the midst of the pandemic, the IRS undertook efforts to publicize the credit, affirmatively "urg[ing] employers to take advantage of the newly-extended employee retention credit." According to the IRS, promoters also are failing to advise taxpayers that they cannot deduct wages covered by ERC credits on the business's income tax returns or that they cannot claim the credit for wages that formed the basis of a PPP loan application that was granted (IR-2022-183, Oct. 19, 2022, https//bit.ly/40XkCMc).