ERTC Eligibility Review
2nd Opinion from a Trusted Tax Professional
"If you were impacted by the pandemic, you now qualify for up to $26,000 per employee, even if you previously received PPP."
THIS IS SIMPLY NOT TRUE
The IRS has taken unprecendented steps to rein in ERC fraud.
If you previously filed for Employee Retention Credits, you deserve to sleep well at night.
Take a second look at who you engaged for your ERC. Challenge whether you truly qualify.
How the IRS Handles ERTC in 2023
The IRS press release on September 14, 2023, was the first of many news releases about ERTC over the coming months. Finally, leadership at the IRS recognizes taxpayers have been misinformed about the qualifying criteria for Employee Retention Credits who thought they were working with a tax professional.
Before IRS auditors begin hammering taxpayers with penalties, they have offered two new programs:
The IRS is offering you a one-time opportunity to repay your Employee Retention Credits and avoid penalties in the event of an audit.
ERTC Application Removal
Already submitted your ERTC application, but have not yet received your refund checks? Now you can remove your application from their queue and avoid additional scrutiny.
"The softest pillow is a clear conscience."
Pay It Back or Keep the Money . . . But Sleep Easy
You've been put in a difficult position. One that tests your integrity. Tests your courage.
Your longtime trusted CPA didn't know enough about ERC to offer an opinion. So you paid a hefty 25% commission to an "As Seen On TV ERC Expert".
You've already received six refunds checks from the US Treasury totaling $235,000, but you never really learned how you qualified other than "limited commerce".
And now the government has offered this lifeline . . . pay back the $235,000 to avoid accuracy and underpayment penalties and interest of $100,000+ that will be due (in addition to repaying the $235,000) if you can't defend an audit.
This is when it pays to have a true tax professional in your corner. A CPA who is an expert in ERTC and has dedicated the past 2.5 years to ERTC and nothing else.
A CPA who has been through IRS audits of ERTC and knows exactly what you'll have to defend.
A CPA who has personally signed thousands of ERTC claims, but also declined to submit thousands of claims.
Learn the truth about your claims and sleep easy knowing your $235,000 is safe, or sleep easy knowing you didn't just send $235,000 back to the government due to unfounded fears.
From Quick Review to a Full Recalculation
The Scope of Each ERTC Review Is Customized to Your Needs
"I finally felt like I was talking to an ERTC expert. Not a call center operator reading a script and saying whatever they could to boost my confidence and get me to sign on the dotted line."
While we hate the idea of an Eligibility Kickoff Call feeling like a sales call - honestly - this is going to feel salesy.
Our full Done-for-You ERTC services sell themselves. And those Discovery Calls are very to-the-point, cut-n-dry.
But you need this to be a discussion about your current situation . . . how you got to this point . . . who you engaged to execute your original ERTC claims . . . why they said that you qualified . . . what you understand about your eligibility . . . and what level of comfort you need to sleep easy at night.
Our fees are flat and our allegiance is only to you.
While we want to deliver a positive outcome because . . . well, we like you and we want you to have received this money legitimately because you will certainly do more good with it than the government.
We are also mindful that if you don't receive a positive outcome, it is better to receive the bad news from us than it is the IRS.
Jump on an Eligibility Kickoff Call and let's start exploring this together.
When you hired an ERC firm to assist with your claims, they promised you full audit support and/or audit-proof documentation.
What they didn't tell you was that they only intend on supporting the audit by providing the IRS with their calculations based on the data that you provided.
Unfortunately, multiple national ERC promoters have straight up told clients "We submitted your ERTC claims based on the narrative you provided, but you will have to defend your eligibility in an audit."
But before the calculations even matter, the first question from the IRS is "How did you qualify?"
Therefore, reviewing the real-time documentation of your eligibility from your ERC provider is the first step for any eligibility review.
This may also involve us gathering documents that you provided to your ERC provider (such as narratives, questionnaires, surveys, interviews, emails) so we can piece together the full picture.
The Documentation Review is a flat fee engagement that leads you to one of these outcomes:
- 1Your ERC provider did an excellent job of supporting your determination of eligibility. Case Closed. Sleep easy knowing your ERC provider has your back as advertised.
- 2Based on the documentation provided by your ERC provider (or lack thereof), and our own cursory review of your facts and circumstances, it is quite clear that you most likely do not qualify. If you want another second opinion, we have a network of attorneys who are actively involved in defending IRS audits and actively suing ERC Promoters to recover client fees.
- 3While you appear to have a good case for qualifying, your ERC provider did not construct a defensible argument to support that conclusion. Furthermore, you do not have contemporaneous documentation supporting your deterination and you could not prove everything required during an audit. Your safest play is to let us perform an independent analysis of your eligibility. This bolsters your argument that you understood the guidance and applied this to the best of your ability. News Flash: In the event of an audit, the IRS will require an interview with YOU, not just your ERC provider. This documentation is your evidence that you made the claims you did with the best of intentions.
This Documentation Review all begins with the Eligibility Kickoff Call.
You've got nothing but hope and a prayer.
Ok, maybe that's a big dramatic.
But based on our initial review of your Eligibility Documentation (or lack thereof), you won't have evidence to support your eligibility during an IRS audit.
If you want to comfortably keep your refunds, you will need to either:
You can jump straight to the Circular 230 Legal Opinion, but there are several reasons why we recommend clients to begin with preparing their own internal documentation.
Preparing Internal ERTC Documentation
The primary component of your Internal ERTC Documentation is your Determination of Eligibility Memo.
This memorandum will provide IRS agents with critical understanding of your business operations, and how it was impacted by governmental orders. But if it was only that simple . . .
As you have seen elsewhere on our website, being impacted by governmental orders alone was not sufficient to qualify for ERTC.
This memo will specifically address all of the relevant points from the IRS's ERTC Guidance, and remain silent on anecdotal evidence and narratives that may demonstrate a lack of understanding of the ERTC qualifying criteria.
Objective: Our team prepares this document as if we are helping the owner to determine their eligibility.
We are ensuring the facts and circumstances support the decision reached by management - that evidence available will suppor that same decision.
We are ensuring that you have demonstrated to the IRS that you claimed these credits in good faith after a thorough understanding of the qualifying criteria.
This document is not signed by JWC ERTC Advisory CPA, but rather we are preparing the draft for management to sign as their own.
Why Prepare an Internal Eligibility Memo First?
For most clients, our work ends with preparing your Determination of Eligibility Memo.
However, some clients will benefit greatly from a Circular 230 Legal Opinion.
For those clients to whom we recommend a Legal Opinion, we still begin with the Determination of Eligibility Memo since it is this stage where facts are gathered, management interviewed and evidence is asserted.
And let's be honest . . . the Memo creation process requires less expertise and carries a lower degree of legal risk for our Firm since the IRS has specific protocols required for forming a legal opinion.
On the next tab we'll discuss why you may prefer a Circular 230 Legal Opinion . . .
If you already have a Determination of Eligibility Memo, why would you spend more money on a Circular 230 Legal Opinion?
When tax professionals are engaged to provide legal or tax advice, they provide their opinion with a degree of certainty based on their understanding and interpretation of the tax code, and how your specific facts and circumstances are applied to that tax code.
Similar to a jury needing to reach a specific degree of certainty to convict (such as "beyond a reasonable doubt" or "more likely than not"), a tax professional will also state a degree of certainty.
If the tax professional reaches an opinion that you had "substantial authority" to make the claim that you did, then the IRS will waive penalties if indeed you are to lose your case in an audit.
It is for this reason that Circular 230 Legal Opinions carry tremendous weight and benefit for the taxpayer.
However, because the tax professional has an increased burden of proof to demonstrate that they executed the proper level of due diligence to form that opinion, the additional work and greater liability to the firm can significantly increase the cost.
We only recommend Circular 230 Legal Opinions when there is a greater-than-normal risk of audit due to the size of the refunds or industry of the client. Or when evidence gathered for the Determination of Eligibility Memo is conflicting and management does not feel comfortable supporting either a positive or negative outcome from that process.
Circular 230 Legal Opinions often involve outside counsel who have extensive experience analyzing ERTC eligibility and defending IRS audits in specific industries. We have seen these legal opinions from some of the top tax firms in the country run as high as $75,000 but for the company receiving $4.2 million, that investment was well worth it for management to sleep well.
If you've made it this far, then you should feel good about your legitimate, legal eligibility for Employee Retention Credits. But depending on the amount of work it took you (and us) to reach this conclusion, you may now question the validity of the math when calculating and claiming the credits.
Truth be told, most ERC firms are pretty good at this part of the process.
Early on we were the first ERC firm to operate with such precision that ERC and PPP were perfectly allocated to maximize both pools of money.
But by the first quarter of 2022, most ERC providers had figured out how to do that as well.
Having said that . . . if the firm that you utilized did not knock it out of the park with determining and documenting your eligibility . . . then you have every right to be a bit nervous that they executed the math correctly also.
Especially when you paid them a hefty 25% commission and they already proved that they were willing to maximize your credit (even if it meant putting you in legal jeopardy during an audit).
Or perhaps your credits were very large and you want a second calculation to ensure your claims were accurate.
If this sounds like your situation, we will essentially work your file with our Done-for-You ERTC team so you have confidence that your other ERC firm isn't setting you up for failure (and a hefty accuracy-related penalty).