Problems with ERC Provider/PEO
The COVID-19 pandemic triggered various relief measures, among which the Employee Retention Credit (ERC or ERTC) emerged as a crucial lifeline for businesses. Understanding and navigating the complexities of this credit proved challenging for many taxpayers and tax professionals alike. The legislation governing the ERC was somewhat vague, and guidance from the IRS regarding its interpretation was limited.
In response to this complexity, numerous companies emerged marketing themselves as ERC experts. Unfortunately, some of these ERTC Companies or ERC Mills provided improper advice regarding eligibility for the credit. Many charged significant upfront fees or fees contingent upon the credit's outcome, further exacerbating the situation. These ERC companies scammed small businesses and these businesses are eligible for refunds and damages from these sham ERTC Promoters.
Seek Refunds of Fees Paid to ERC Scam Mills
Sham ERC Promoters are companies that told legitimate businesses they were “eligible” for the Employee Retention Credit (“ERC”) – without doing a proper analysis or any analysis at all. Many of these companies’ “service agreements” include “disclaimers” to the effect that they are not providing “tax advice” or “CPA services” and are not “tax preparers” or “accountants.” At the same time, the companies told businesses they would calculate a business’s ERC in exchange for the business paying a fee based on a percentage of the calculated ERCs. Many of the businesses that did so later determined that it was a scam and they were not eligible for the credit and may be forced to repay a significant part of the credit amount or enter into a Voluntary Disclosure with the IRS.
The IRS has warned about such “aggressive promoters making offers too good to be true” by “blasting ads on radio and the internet touting refunds involving Employee Retention Credits” “The aggressive marketing of these credits is deeply troubling and a major concern for the IRS” and “there are promoters misleading people and businesses into thinking they can claim these credits.”
Your business could be one of the many that Sham ERC Promoters – a multi-billion-dollar “industry” of sophisticated con artists – scammed their clients into claiming ERCs after paying nonrefundable “contingency fees.” If so, your business may be entitled to financial compensation. Many of these ERC Mills will refund fees without having to file a lawsuit.
Latest on ERC Processing Time & Fraud Alerts
Learn more about ERC refund processing time updates and fraudulent ERC provider details released by the IRS in 2023 and 2024.
Improperly Claimed ERC through an ERC Provider or PEO? Seek Legal Help to Recover Losses.
As a result, many businesses suffered damages due to improper advice on the Employee Retention Credit. If you find yourself in such a situation, seeking legal assistance may be advisable. Frost Law performs an analysis regarding the calculation of the credit as well as determining eligibility. Additionally, Frost Law offers support for disputes with return preparers or ERC providers, helping affected businesses understand their options and potentially recover additional funds.Moreover, if your business utilized third-party payroll processors or Professional Employer Organizations (PEOs) to claim the credit, you may have additional considerations. Some PEOs may have failed to file for certain periods or retained a portion of the entitled refund (including interest), leading to further complications and potential losses.
Businesses Take Action Against ERC Fraud: Understand Your Legal Rights.
Lawsuits related to these issues have begun across the country, highlighting the severity of the situation. If you suspect that your business may have missed out on benefits or suffered losses due to improper handling of the ERC by third-party entities, Frost Law can provide guidance and support in exploring your options for potential recovery.
In summary, navigating the complexities of the Employee Retention Credit during the COVID-19 pandemic proved challenging for many businesses. Seeking legal assistance from firms like Frost Law can help businesses address disputes, understand their rights, and potentially recover any additional funds to which they may be entitled.
Understand Your ERC Options
Our ERC Practice is your one-stop destination for all things related to the Employee Retention Tax Credit. Whether you need a second opinion regarding eligibility, representation in an audit, or information about your ERC refund claim, our team of professionals are here to assist you every step of the way.
ERC Litigation
The IRS is cracking down on Employee Retention Credit (ERC) claims. If your claim is denied or stalled, ERC litigation may be your best recourse. This process involves suing the IRS to recover your rightful credit.
ERC Resource Center
Need assistance with your ERTC claim? Learn what ERC services fit your needs!
ERC Audits and Appeals
Has the IRS initiated an audit of your ERC claim or disallowed the credit? Get insights from experienced tax attorneys on how to properly evaluate and substantiate your claim.
ERC Second Opinions, Withdrawals, and Voluntary Disclosures
If you have doubts about the accuracy of your existing ERTC claim or worry about potential audit risks, Frost Law offers second opinions and risk assessments to protect your business.
Expedite Your ERC Refund
If your ERC refund is delayed which is causing an undue financial hardship, there are two ways we can help. First, we can try to expedite your claim through the Taxpayer Advocate Service (TAS) by filing a 911 claim. Second, we can file a refund suit in either the United States District Court or the Court of Federal Claims.
Meet the ERC Team
Email or call our team today for a no-cost ERC eligibility analysis. You owe it to yourself to make sure you are not leaving money on the table.
Did Your PEO or Payroll Provider Leave Money on the Table?
If your business used a Professional Employer Organization (PEO), they may have failed to properly file your ERTC claim. Frost Law can help you determine if your PEO breached its obligations and take action to recover potential lost tax benefits.
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Are You Facing Financial Hardship As A Result Of A Delayed ERC Refund?
Your business may deserves its Employee Retention Tax Credit refund, but IRS delays can be crippling. If you desperately need those funds, there are options. The Taxpayer Advocate Service may be able to work with the IRS to expedite your claim. Law firms with extensive experience in tax matters, like ours, can help you navigate the TAS process and present a compelling case for urgent action.
Frequently Asked Questions
Start by reviewing your contract with the PEO to see if they were obligated to file the ERC. If so, you may have grounds for a legal claim. Frost Law can help you assess your options and potentially take action to recover the lost tax benefits.
Potentially, yes. Even if your PEO made errors or didn't file, there might be a chance to rectify the situation. The deadline for claiming or amending ERC filings depends on the specific quarters. Contact Frost Law for a personalized consultation.
ERTC calculations are complex, and errors are possible. Frost Law can review your ERC claim and the PEO's calculations to determine if you're entitled to a larger refund.
Potentially yes, the statute of limitations for claiming or amending your ERTC is approaching. Don't delay in seeking legal counsel. Frost Law can help you understand the deadlines and take timely action to protect your rights.
