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Frost Law maintains a leading role in the nationwide effort to ensure that a wide variety of employers are rewarded, via the Employee Retention Credit (ERC), for keeping their employees on payroll during the pandemic. Frost Law has devoted its team and resources to ensuring that pandemic-impacted businesses optimize their ERC cash relief (up to $26,000 per employees). While many of the businesses that we have helped to obtain this lucrative, refundable payroll tax credit started their journey here at Frost Law, our team has embraced its growing reputation as the go-to professionals for reviewing and correcting substandard, or outright erroneous ERC applications, that either jeopardize employers' full award amounts or place employers at audit risk for inaccuracies.

Have Questions? Call us for Your consultation.

Like most of the pandemic-related relief measures, the ERC presented a novel set of intricate and complex rules and issues, which even many experienced CPAs, traditional accountants and other professionals lacked the resources to unravel completely. Among the most common problems our team is finding in ERC applications prepared by others, includes:

  • Failure to evaluate whether a company is ERC eligible for each separate quarter of the March 13, 2020 - September 30, 2021 period
  • Preparer misunderstanding that even though a business’s revenue increased during a quarter or quarters, ERC eligible remains possible as a result of “partial shutdowns” due to government restrictions
  • Excluding businesses that received PPP loans even though they may still be ERC eligible
  • Inaccuracies resulting from wage inclusion errors in the “small v. large employer” context
  • Inaccuracies due to misunderstandings involving the “full-time employee” term of art in the ERC context
  • Failure to understand when “part-time employees” qualify
  • Failure to appreciate the interplay between wages used in ERC calculations and wages included in R&D Credit
  • Neglecting to back out owner wages and/or PPP forgiveness (*remember PPP forgiveness does not create “gross receipts,” and neither do Shuttered Venue Grant proceeds and Restaurant Revitalization Funding)
  • Failure to substantiate ERC claims based solely on supply chain issues with specific government mandate(s) implicated
  • A broad spectrum of misunderstandings and inaccurate calculations in the context of non-profits
  • Failure to correctly apply aggregation rules

At Frost Law, we have a sophisticated process in place which helps businesses get the maximum accurate amount of ERC, as quickly and smoothly as possible. We make sure that you can keep your focus on running your business and getting the full benefits the government is offering. Again, the ERC rules are complex, and ERC claims are filed under penalties of perjury. We urge any business with concerns about a previous ERC analysis to have our team review it. Contact our team today at 410) 497-5947 or you can schedule some time to meet with us using our brief contact form.

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Common Initial ERC Filing Problems — Are You Optimizing Relief Potential While Minimizing Audit Risk?

Published on
October 5, 2022
Common Initial ERC Filing Problems — Are You Optimizing Relief Potential While Minimizing Audit Risk?
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Frost Law maintains a leading role in the nationwide effort to ensure that a wide variety of employers are rewarded, via the Employee Retention Credit (ERC), for keeping their employees on payroll during the pandemic. Frost Law has devoted its team and resources to ensuring that pandemic-impacted businesses optimize their ERC cash relief (up to $26,000 per employees). While many of the businesses that we have helped to obtain this lucrative, refundable payroll tax credit started their journey here at Frost Law, our team has embraced its growing reputation as the go-to professionals for reviewing and correcting substandard, or outright erroneous ERC applications, that either jeopardize employers' full award amounts or place employers at audit risk for inaccuracies.

Have Questions? Call Our Team Today.

Like most of the pandemic-related relief measures, the ERC presented a novel set of intricate and complex rules and issues, which even many experienced CPAs, traditional accountants and other professionals lacked the resources to unravel completely. Among the most common problems our team is finding in ERC applications prepared by others, includes:

  • Failure to evaluate whether a company is ERC eligible for each separate quarter of the March 13, 2020 - September 30, 2021 period
  • Preparer misunderstanding that even though a business’s revenue increased during a quarter or quarters, ERC eligible remains possible as a result of “partial shutdowns” due to government restrictions
  • Excluding businesses that received PPP loans even though they may still be ERC eligible
  • Inaccuracies resulting from wage inclusion errors in the “small v. large employer” context
  • Inaccuracies due to misunderstandings involving the “full-time employee” term of art in the ERC context
  • Failure to understand when “part-time employees” qualify
  • Failure to appreciate the interplay between wages used in ERC calculations and wages included in R&D Credit
  • Neglecting to back out owner wages and/or PPP forgiveness (*remember PPP forgiveness does not create “gross receipts,” and neither do Shuttered Venue Grant proceeds and Restaurant Revitalization Funding)
  • Failure to substantiate ERC claims based solely on supply chain issues with specific government mandate(s) implicated
  • A broad spectrum of misunderstandings and inaccurate calculations in the context of non-profits
  • Failure to correctly apply aggregation rules

At Frost Law, we have a sophisticated process in place which helps businesses get the maximum accurate amount of ERC, as quickly and smoothly as possible. We make sure that you can keep your focus on running your business and getting the full benefits the government is offering. Again, the ERC rules are complex, and ERC claims are filed under penalties of perjury. We urge any business with concerns about a previous ERC analysis to have our team review it. Contact our team today at 410) 497-5947 or you can schedule some time to meet with us using our brief contact form.

Footnotes