Are You Aware of the ERC Ticking Time Bomb?

The IRS recently implemented new guidelines for claiming the ERC, which is aimed at

investigating improper and unsubstantiated claims. Unfortunately, many unlicensed ERC

promoters failed to properly advise, qualify, and substantiate ERC claims – leaving the business owners with potentially catastrophic legal consequences – including forfeiture of the ERC funds, penalties, interest, legal fees, and even criminal liabilities.

The purpose behind the ERC was to provide businesses with a measure of economic reprieve for maintaining their employees amidst the Covid-19 closures and hardships. However, the credit has resulted in a slew of unsubstantiated claims by promoters “selling” the ERC.

As a result, the IRS took drastic measures to stop such abuse on September 14, 2023 by issuing a moratorium on all new claims until at least the end of the year. The IRS also simultaneously issued multiple ERC guidelines, articles, and updates. Items of note in these guidelines is a proactive avenue for business owners to withdraw improperly filed claims and a procedure for settlement. The IRS also disclosed that thousands of claims have already been referred for audit, 252 criminal investigations are initiated involving 2.8 billion in potentially fraudulent ERC claims, and 15 federal charges with 6 convictions have resulted.

If you are interested in connecting with LS Carlson Law’s legal team to help inform business owners about this ticking ERC time bomb and their options, please visit: