Employee Retention Credit (ERC) Scams are on the Rise

Stressed person paying taxes

A Warning to Small Businesses and Independent Contractors:  ERC (Employee Retention Credit) Scams are on the Rise.

At the San Diego IRS Tax Forum workshops I attended last week, we were informed that Employee Retention scams are on the rise, and that the IRS is stepping up enforcement. Ironically, while we were there for the event, several of us talked about receiving phone calls, text messages and emails promoting these exact scams. Apparently the scammers didn’t know who they were pitching their scams to!

The problem with the claims made by the shady promoters is that there are complex formulas and restrictions to obtaining the credit. One of those restrictions is no double-dipping – after getting a refundable PPP loan to pay employees during COVID shutdowns, you can’t also apply for the ERC credit. If anyone tries to tell you that claiming the ERC credit is “easy”, or that it can be done in “30 minutes”, they’re probabaly dead wrong.

Want to know if you qualify for the ERC credit? Consult with an experienced tax professional, and make sure to check their credentials. Curious about the ERC credit? Type “Employee Retention Credit” in the Search bar on the IRS website at IRS.gov for the details.

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