IRS ERTC Warnings
Introducing the Ironclad Integrity Initiative
The IRS Warns of ERC Promoters Misleading Business Owners
The IRS recently spotlighted ERTC Promoters at the top of their list for the 2023 Dirty Dozen list of tax scams.
How Can You (Without Being An ERC Expert) Differentiate the "Good Guys" from the "Bad Guys?
You rely on tax professionals for expert advice, but how do you know when a firm is truly a tax expert versus an expert marketer who says all the right things? As the first (and only) registered CPA Firm in the country focused solely on ERC, we've been on the frontlines as Sales & Marketing companies have positioned themselves as "ERC Experts".
We admit . . . they do a great job of marketing.
They say all the right things. In fact, they say many of the things we've been saying since March 2021.
But Actions Speak Louder Than Words -And We Finally Caught Them!
Over the last six months we secret-shopped most of the ERC "experts" that you see on TV. We gave them bogus company information and watched as the lies, deception and misinformation runneth over . . .
So how do we PROVE ourselves in a sea of "ERC experts"?
The Ironclad Integrity Initiative™
Integrity is an often over-used term: "Doing the right thing when no one is looking."
But in this case . . . that's quite appropriate. Because unless you get audited by the IRS, no one is looking at your ERC claims. It is easy enough for an ERC Firm to tell you what you want to hear and you'll be none the wiser unless and until you get audited . . . and then it's too late.
For that reason, we invite you to explore the three core pillars of The Ironclad Integrity Initiative that sets us apart.
ERC Fraud takes shape in three forms that we address with The Fraud Firewall:
- ERC Promoters will require that you sign a Power of Attorney so that they can sign your tax returns for you. They do this under the guise of "simplicity" for you. But in reality, they have complete control to sign your tax returns even though you must defend your eligibility in an IRS audit.
- ERC Promoters are usually marketing companies that make you sign their contract, and then they subcontract your files to a third-party CPA or attorney. The salesperson you speak with will make big promises, but their contracts are written to offer no guarantees and limit their liability in the event of an audit. The subcontractors are highly incentivized to approve your eligibility because if they disqualify clients, the ERC promoter will stop sending them new files. Their interests do not align with yours and you had better believe that their contracts are written in such a way that neither party will take responsibility for determining your eligibility during an IRS audit. (From our secret-shopping, we have recorded calls of the signing attorney telling us the exact opposite of what the salesperson told us.)
- The really nefarious ERC promoters may take your original Form 941's, prepare amendments without you knowing and have checks mailed to them. This is not just defrauding you, but defrauding the US Government. We've only heard of this happening one time in the last two years, but surely there are more crooks out there.
Steps to protect yourself when hiring an ERC Firm:
- Confirm that they are a registered CPA Firm (find out what state they are registered), and not just a company with licensed CPA's on staff.
- Confirm that the person who signs the Services Contract (or Engagement Letter) is the same person who is signing as a "Paid Preparer" on your amended Form 941's.
- Confirm that you will be signing and mailing the amended Form 941's yourself, and you are not required to sign a Power of Attorney so they can sign for you.
The SmartStart Onboarding Process seems rather obvious . . .
- Determine your qualifying dates based your Intake Form, Survey, and discussion with management (as needed)
- Then ask for your confidential tax and payroll records, calculate your tax credits by quarter and prepare the Form 941-X's
You would be surprised by how many ERC Firms ask for your quarterly payroll tax returns and confidential payroll records upfront . . . without ever knowing if you qualify or not.
The really shady firms will also require that you sign a Power of Attorney (giving them authority to sign your tax returns) before they will explain why you qualified.
These are YOUR tax returns.
You have every right to understand how you are qualifying before handing over confidential records (and never signing a Power of Attorney).
Steps to protect yourself when hiring an ERC Firm:
- Do not provide Form 941's or Payroll Records until the ERC Firm has explained how you qualify.
- Confirm that you can back out of the agreement and choose note to file the amendments if you do not agree with their assessment of your eligibility.
The DirectCheck Express means that your refund checks will be mailed directly from the US Treasury to your business.
Most ERC Firms are requiring their clients to direct the checks to a lockbox so that the Firm can take out their fees before paying you (unless you want to pay all their fees upfront).
However, in our experience, this is causing clients to wait 1-2 more months at a minimum because of other unintended consequences.
Common problems include payroll companies changing the official address on record, lockboxes being slow to process the checks, and checks being returned as undeliverable to the IRS because the lockbox loses authorization to receive your mail.
Plus, ALL your mail from the IRS goes to the lockbox - creating one more layer of complexity when you receive notices.
Steps to protect yourself when hiring an ERC Firm:
- Confirm that your refund checks will come directly to you and not a lockbox.
- Do not sign a Services Agreement requiring you to open a lockbox, especially if you pay their fee upfront.
Why Choose JWC ERTC Advisory CPA?
because not every erc firm is created equally . . .
Fighting Fraud from Step Zero
Read how our Ironclad Integrity Initiative protects you in ways you never imagined. It is easy for anyone to say "Trust us, we are a CPA firm", but let us explain how our actions speak louder than words.
Become an Educated Taxpayer
Our founder thrives on educating taxpayers about ERC - whether you are our client or not. Videos, Webinars, Articles, eBooks, FAQ's and The Best Comprehensive ERTC Guide for CPA's.
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Sometimes you just need to talk this thing out. Schedule a call with Don to get your questions about ERC answered, pre-qualify your business and see why our clients rave about our client service.
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