The Employee Retention Tax Credit (ERC) program has provided much-needed relief to eligible businesses. However, the IRS has raised concerns about the validity of some claims. The IRS recently imposed a moratorium on processing new ERC claims, effective through at least the end of the year. This pause allows the IRS to implement additional safeguards and compliance measures to prevent abuse, protect businesses from predatory practices, and ensure that legitimate claims receive the support they need.
The Lake Law Firm has a proven track record of assisting businesses in filing valid ERC claims, ensuring that only those who genuinely qualify benefit from the program. We remain committed to helping businesses navigate the moratorium, ensure compliance, and protect their interests during these uncertain times.
Our firm is providing comprehensive support to businesses affected by the ERC moratorium. Are you a business owner who is concerned they may be audited? You can take advantage of our program in which we review ERC claims, amend incorrect submissions, assist with payback processes, and provide audit defense services starting as low as $2,750. Call (888) 525-3529 to learn more about how The Lake Law Firm can protect your business during the ERC moratorium.
The Employee Retention Credit (ERC) is a tax incentive program introduced by the government under the CARES Act in March 2020. Congress created the ERC to encourage employers to maintain their workforce and continue paying employees during the pandemic, when layoffs and unemployment were high.
The ERC underwent several changes and extensions, allowing business owners to recover these tax credits until April 2024 and April 2025. Businesses affected by government mandates or those that suffered a decline in revenue can recover up to $26,000 per W-2 employee for the qualifying quarters of 2020 and 2021.
This temporary suspension of new ERC claim processing, which extends through at least the end of 2023, reflects the IRS’s concern over the abuse of the ERC.
The IRS’s decision to impose the moratorium stems from several worries:
The IRS has observed a notable increase in businesses submitting ineligible ERC claims. The IRS Commissioner, Daniel Werfel, noted that the agency should only see a trickle of businesses applying at this point. However, Werfel stated that 600,000 businesses submitted claims for the credit in the past 90 days alone.
Aggressive promoters and marketing firms have played a significant role in driving the uptick in ERC claims. These entities have employed high-pressure tactics to convince businesses to submit claims regardless of eligibility. These schemes have raised ethical and legal concerns. Businesses may unknowingly submit an ERC claim they do not qualify for.
Businesses that submit improper ERC claims may expose themselves to financial risks. False claims may result in having to repay claimed credits, often with added penalties and accrued interest. Therefore, businesses could find themselves in a worse financial position than if they never submitted the claim at all.
The IRS has initiated a series of criminal investigations into promoters and businesses suspected of filing fraudulent ERC claims. The IRS Criminal Investigation (IRS-CI) division is actively investigating cases of fraud related to COVID-19 relief programs, like the ERTC and Payroll Protection Program (PPP). They have uncovered suspected pandemic fraud exceeding $8 billion. As of July 31, 2023, IRS-CI has started 252 investigations involving over $2.8 billion in potentially fraudulent ERC claims. Out of these, fifteen have led to federal charges. Among these, six cases have resulted in convictions, with four already in the sentencing phase, with an average sentence of 21 months.
Basically, the IRS believes that the ERC is not working as intended.
Under normal circumstances, the IRS aimed for a standard processing goal of 90 days for ERC claims. However, during the ERC moratorium period and the subsequent compliance reviews, this processing time has been extended to 180 days.
Also, claims facing further review or audit may experience even longer processing times. Additionally, the IRS may request additional documentation from the taxpayer to verify the claim’s legitimacy.
The Lake Law Firm has stood as one of the leading advocates for providing business owners with assistance in submitting accurate and truthful ERC claims. As a reputable law firm equipped with attorneys and ERC advisors, we only file legitimate ERC claims. Our commitment to businesses remains steadfast, and despite the recent pause, we are dedicated to continuing our support for business owners.
To continue our goal of helping businesses during the ERC moratorium, The Lake Law Firm has created a program to revise ERC claims with no penalties and provide business peace of mind.
Our attorneys and ERC advisors leverage their extensive knowledge of tax laws to review ERC claims. We leave no detail unchecked, carefully examining each element of the claim to confirm that it aligns with the program’s eligibility criteria and IRS regulations. We understand that the ERC program is complex with precise requirements, and we’re here to ensure that businesses feel confident in their ERC submission.
Inaccurate or erroneous claims can lead to legal consequences, including financial penalties and interest payments. Our commitment is to prevent such outcomes by providing businesses with guidance on whether to file, not file, or withdraw their application.
Beginning at $2,750, our upfront file review service has flexible prices based on your business size. Below you can find a breakdown of our charges for reviewing your ERC claims:
We also provide bulk file review for processors and funders:
For larger companies, there are additional charges per file:
The IRS is offering businesses that have already filed the opportunity to withdraw an existing claim. If a company has already sent in an ERC application and the IRS has not yet processed or paid the claim, they can still retract it if they realize it was filed incorrectly. This withdrawal option holds true even if their case is currently being audited or is awaiting an audit.
If you are worried about the legitimacy of your filed ERC claim, we can help. We can review your filed claim to assess whether it is valid. If we find it inaccurate, we can guide you through the steps to amend or withdraw the claim.
At The Lake Law Firm, we recognize that IRS audits can be a source of significant anxiety for businesses, especially when it comes to ERC claims. We hope to put businesses at ease when facing IRS audits. Through our in-depth knowledge of tax laws and ERC eligibility, we will defend your business’ ERC claim against an IRS audit.
We offer audit defense services that extend up to five years. Therefore, we ensure your ERC claim is well protected down the line. Our pricing for amending, filing your amended ERC claim, and defending it is as follows:
The IRS will provide details on a settlement program in the fall that will allow businesses to repay ERC claims. The ERC payback program enables businesses to avoid penalties and future compliance issues for claims paid that they now believe to be fraudulent.
The Lake Law Firm understands that circumstances may arise where businesses, in good faith, received ERC funds that were later determined to be in error. When the IRS finalizes the details of the ERC settlement program, we can help you efficiently and accurately repay any funds that need to be returned, including calculating repayments and ensuring compliance with the payback program.
Our firm offers a proactive solution that protects and empowers business owners during the ERC moratorium. Contact The Lake Law Firm today if you applied for the ERC or are considering applying for the ERC and are worried about whether your claim is accurate and legal. Don’t wait, call (888) 525-3529.
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