Employee Retention Credit Supply Chain Disruption 

 October 26, 2023

By  Jace W Campbell, CPA

Employee Retention Credit Supply Chain Disruption

Understanding the impact of supply chain disruption on employee retention credit (ERTC) is crucial in today’s volatile economic climate. For businesses affected by partial or full suspensions due to governmental orders, additional tax credits could potentially be claimed. Yet, the question remains: how does one confidently and ethically navigate this complex terrain? 

The Basics: What is the Employee Retention Tax Credit?

At its core, the Employee Retention Credit is a refundable tax credit designed to encourage businesses to keep employees on their payroll despite facing hardship caused by the COVID-19 pandemic… Understanding it thoroughly could be an arduous task as it can consume dozens of pages. Nonetheless, it’s essential to break down its intricacies for easy comprehension…

Qualifying for the ERTC amid Supply Chain Disruptions

When it comes to qualifying for the Employee Retention Credit (ERTC), businesses are faced with a myriad of factors to consider. However, amidst ongoing pandemic circumstances, one of the most pressing challenges for businesses has been dealing with supply chain disruptions…

To qualify based on a supply chain disruption, you must demonstrate that this disruption – whether due to reduced availability of materials or hindrance in supply line logistics – had more than a nominal impact on your operations. It’s not enough to simply state that there was a disruption; the IRS will probe deeper… You need to prove that your supplier was also experiencing a “full or partial suspension of operations” and that no alternative source for those materials was available. Keep in mind that inflated prices cannot be cited as a reason for not seeking an alternative source.

Navigating these complexities is undeniably challenging. But remember, you know your business better than anyone… You understand the intricacies of your operation, and you’re aware of the modifications you’ve made to comply with governmental orders at various levels. This intimate knowledge is instrumental in making a solid case for ERTC qualification.

Now consider this scenario: some firms offering ERTC services may tell you that disruptions in hiring or any form of pandemic impact can qualify you for ERTC… While it’s tempting to accept these claims at face value, it’s crucial to proceed with caution.

Imagine facing an IRS audit down the line… When asked about how you determined your qualification for ERTC, directing them towards your hired ERTC firm isn’t going to cut it. The responsibility ultimately falls upon you – the business owner – irrespective of who guided you through the process…

Therefore, treat claiming an ERTC with as much rigor as running other aspects of your business. Ensuring thorough documentation and clear understanding is key here… Falling prey to oversimplified checkboxes and too-good-to-be-true promises can lead to problems in the future.

Remember, understanding the nuances of supply chain disruptions and their role in ERTC qualification is crucial… But more importantly, it’s essential to be cognizant of your responsibility in this process. It’s not just about meeting immediate financial needs; it’s about safeguarding your business from potential risks down the line.

Also read: How is Employee Retention Credit Reported on Tax Returns?

Beware: Lies and Deceptions from Unscrupulous Firms

Navigating the world of Employee Retention Credit (ERTC) can often lead businesses down a perilous path marked by deception… The landscape is rife with firms employing manipulative tactics to lure unsuspecting clients into their web with misleading promises regarding ERTC qualification. It’s crucial for businesses, especially small ones striving for stability, to understand not just the lies these firms might peddle but also how they can protect themselves from such fraud…

The first obstacle is the ineffectiveness of due diligence. Despite exhaustive research and efforts to validate claims, the confusion surrounding ERTC often persists. This challenge stems from an inability to see beyond flashy marketing pitches and discover genuine expertise in an environment overflowing with misinformation, ambiguity, and potentially deceitful practices.

Coupled with this is the pressure of time. As the window for claiming ERTC rapidly closes, urgency mounts – adding another layer of stress onto an already complex situation. This ever-ticking clock compounds frustrations, making business owners feel trapped amidst a convoluted landscape fraught with pitfalls and obstacles.

It’s important to acknowledge that these business owners are acutely aware of what’s at stake here… An error in judgment or misplaced trust in a less-than-expert firm can lead to costly mistakes, legal complications or missed opportunities – risks that they simply cannot afford. This high-stakes game necessitates more than just information; it calls for a beacon of integrity amidst the chaos.

Small business owners require more than mere assurances; they need a way to validate claims and test the validity of those assurances… In a world where everyone purports expertise in ERTC, these individuals are desperately seeking a touchstone of truth – something that will help them discern between real and imitation expertise. Ultimately, they need guidance on how to engage confidently and securely with the ERTC process…

To sum up, unscrupulous firms and their deceptions can cloud the path to ERTC qualification… But with diligence, awareness, and a firm commitment to integrity, businesses can protect themselves against such fraud and navigate the intricate terrain of ERTC with confidence.

Read more: Employee Retention Credit for 2020

Why Engage with JWC ERTC Advisory CPA?

Finally, why should you trust JWC ERTC Advisory CPA amidst this sea of misinformation and complexity? The answer lies in our approach… We believe in guiding our clients through an intensive Enhanced Restrictions Survey that educates about how government defines a “full or partial suspension of operations” and solicits detailed responses. This helps ensure clients are well-informed and prepared for potential IRS audits…

Conclusion: Navigating the ERTC Landscape with Confidence

In conclusion, the landscape of ERTC is complex and often fraught with uncertainty… However, armed with the right information and supported by a trusted advisor like JWC ERTC Advisory CPA, businesses can confidently navigate this terrain, ensuring they rightfully claim any tax credits they’re entitled to – while staying clear of unethical practices.

Jace W Campbell, CPA

Jace founded JWC ERTC Advisory CPA in March 2021 as the nation's first and only public accounting firm focused solely on ERC . . . and nothing else. He has personally signed over 9,000 ERTC claims and is proud to be executing these claims conservatively, and how intended by Congress.

He has a passion for educating clients so they can make the best decision for themselves.  If you read articles and watch videos that Jace produced in 2021, his approach is the same now as it was then.

While other firms pivot their messaging to comply with new IRS guidance, Jace continues preaching the same conservative principles that have helped clients recover hundreds of millions . . . while sleeping easy at night.

related posts:

Can You Claim Employee Retention Credit in 2023?

Can You Claim the Employee Retention Credit in 2022?

Employee Retention Credit Scams: What You Need to Know

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