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The Employee Retention Credit - It's A Circus Out There

Updated: Mar 20, 2023

There’s some funny business going on with the Employee Retention Credit services offered by many of the “refund specialists” that keep calling small businesses about this tax credit.


Let's break down some of the "magic acts" we have seen lately.


The Fine Print Funny Business

Before engaging with an ERC provider, be sure to read the fine print.


Some ERC providers remove all responsibility from themselves to make a determination of the taxpayer’s eligibility - whether under the reduction of gross receipts tests or under a more than nominal impact due to shutdown or shelter-in-place mandates. They may tell you to consult your CPA or a tax professional. Others go as far as to include an INDEMNIFICATION clause regarding eligibility determination in their agreements.



Why that’s a big deal:

Not every business qualifies

for the Employee Retention Tax Credit!



The FAQs Funny Business

There are many factors in vetting whether a business can claim the ERC. The study provider should be the party to determine the taxpayer’s eligibility, not the client.


The law and ensuing guidance surrounding the ERC encompasses more than 150 pages. That’s a lot of details to digest and interpret, even for veteran tax incentive practitioners. One qualification methodology is a simple gross receipts test, but the second methodology is more nuanced with 71 FAQs issued by the Service about various taxpayer scenarios. Our team has spent many hours breaking down the IRS’ memos and FAQs… so much so that we refer to scenarios presented in the FAQs in casual ERC conversations.


Why would a taxpayer engage a firm to handle their ERC study when the provider doesn’t make their own determination of eligibility and pushes that back on the business owner who probably has not read the law and has little understanding of what creates eligibility?



There's Still Time To Claim The ERC - Minus The Funny Business

This is an amazing opportunity for businesses that still haven’t taken the credit!


If your business still hasn’t claimed the EmployeeRetentionCredit and you qualify, with:


  • 20 years tax credits experience,

  • no upfront fees, and

  • full audit defense


Tax Credit Collective is here to help you confidently capture every available dollar.





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