Check Your ERC Compliance & Avoid IRS Penalties

Did Your Business File Through an ERC Mill?

ERC Compliance Review is a comprehensive analysis of your existing Employee Retention Credit claim, assessing its compliance with IRS rules and identifying any potential liabilities or errors. You will receive a detailed report highlighting any potential risks of your ERC claim.

Avoid ERC audit penalties and gain peace of mind.

Is ERC Compliance Review Right for Your Business?

ERC Compliance Review is for any business owner uncertain about the validity of their Employee Retention Credit claim. ERC Review is a proactive measure that reveals any potential red flags in your ERC claim. Even if you’re confident your business truly qualified for ERC, you need to have specific documentation in case of an IRS ERC audit.

Can you substantiate your business’ ERC compliance?

Businesses may need the following documentation to demonstrate ERC compliance:

  • A detailed calculation of the ERC credit for each employee
  • A COVID-related government order timeline and summary
  • Documentation to substantiate a 10% “nominal disruption”
  • Detailed employee count analysis

Why Review Your ERC Claim Now?

The Rise of ERC Fraud

Many businesses have filed for Employee Retention Credits they don’t actually qualify for, through no fault of their own. Dubious tax credit pop-ups, recently dubbed “ERC Mills,” advise every client to claim ERC even though they may not qualify. These companies do not conduct an appropriate analysis of the business’ qualifications. In many cases, ERC Mills also advise companies that do qualify for ERC to overclaim their credit amount.

Increased ERC Audit Risk

The IRS is aware of these ERC scams and has begun targeting abusive ERC claims by sending IDRs (Information Document Request) to businesses with unsubstantiated credits. Many companies have already undergone ERC audits, and multiple IRS warnings caution employers to take extra care when vetting companies that promote the credit.

IRS auditor reviewing business ERC claim for tax law compliance using magnifying glass

Review Your ERC Compliance

Businesses that file improperly through a questionable tax credit provider usually do not have documentation substantiating their claim, putting them at risk of penalties and interest. As the IRS ramps up enforcement through ERC audits, business owners should have their ERC filing double-checked by an experienced and trusted firm while there is still time to correct any improperly claimed credits.

ERC Compliance Review: What Omega Provides

Our expert team of tax credit analysts will conduct a complete examination of your claim, assessing all key areas for ERC compliance and revealing any inaccuracies that may risk ERC audit penalties, including:

  • Calculation methodology
  • Filing documents
  • Eligibility criteria
  • Supporting evidence & documentation
  • Timeline of Government Orders

Your business will receive a detailed report and comprehensive analysis illuminating any potential inaccuracies in your ERC filing. Contact us to learn more about ERC Compliance Review today.

Employee Retention Credit Compliance Review FAQs

Claiming the Employee Retention Credit does not directly increase your business’ risk of being audited. As long as your ERC claim is calculated correctly and includes substantial evidence of your business’ eligibility, the IRS should have no reason to believe an audit is necessary. Omega can identify any potential holes in your ERC claim and ensure your calculations are correct. Contact us today to find out more.

Miscalculated or improperly claimed ERC credits can be met with failure to deposit penalties and interest due on the late return of 20% to 40% of the underpaid tax, and up to 75% if the fraud was committed knowingly. Business owners are always responsible for the information reported on their tax returns — even if you used an outside tax preparer or tax credit specialist to claim ERC.

The IRS recently extended the statute of limitations from three years to five years for all tax amendments regarding ERC. This extension of the ERC audit period allows the IRS another two years to conduct ERC audits on businesses that, among others, may lack substantial documented evidence of their eligibility.