ERC Shops Targeting Small Business Owners including Dental Offices
Over the past two years, ERC shops have poped up across the country and used questionable and aggressive marketing tactics to lure small business owners to signup for their Employee Retention Credit services.
These shops often lured in unsuspecting business owners including dental office owners with large ERC refund checks. They often provided little to no backup behind the qualifications they used for these periods. Many used the supply chain or vague governmental orders test.
IRS Now Aggressivly Pursuing ERC Claims
The problem was the IRS was too behind to provide any real specific clarity. Now as the IRS catching up, they are cracking down on small businesses that applied and got these ERC refunds, by clawing back the refunds and imposing heavy fines, penalties and interest on the tax payer. This combined with the cost of representing themselves in the audit, CPA and Legal fees can be a significant sum.
Recently the IRS provided clarity and specifics on what they are looking for when it comes to supply chain disruption as a qualification. This weeds out a large chunk of the grounds these aggressive ERC shops were using to apply for the large refund claims.
What to do if you used a third party for your ERC claim
- If you are a Dental Practice owner and used a third party ERC firm, be sure to be aware of updates regarding ERC being posted by the IRS.
- Secondly be sure you clearly understand the qualifications they used to apply for the credit. If one of the qualifications is supply chain disruption, changes are the money needs to be paid back.
Anything involving an audit risk is worth reviewing with someone who signs the return, which is part of our dental tax strategy work.
