Do you want confidential legal insight into potential fraud or scams involving the Employee Retention Credit (ERC) program? If you are still waiting for your ERC refund or have eligibility questions, contact Burnett Injury Group about your options if you received improper ERC guidance.
There have been numerous reports of fraud and scams involving the Employee Retention Credit (ERC) program that was introduced during the COVID-19 pandemic to support businesses. The issues stemmed from complex eligibility requirements and improper guidance by some third-party firms, leading to substantial amounts of misallocated or improperly claimed funds. Learn some of the ERC litigation issues in Annapolis and contact our dedicated ERC litigation attorneys for help.
Common Problems and Scams
The following are potential issues that occur in ERC litigation in Annapolis:
- Misrepresentation of ERC Eligibility: Many third-party companies have misrepresented the eligibility criteria for the ERC to business owners. They often promise eligibility and large tax refunds even if the business does not meet the IRS’s criteria for the credit. The ERC was intended for businesses that experienced a significant decline in gross receipts or were subject to full or partial suspension of operations due to government orders.
- Exaggerated ERC Claims: Some firms encouraged businesses to overstate their eligibility or claim the credit without regard to the proper calculations, leading to exaggerated claims. This can result in hefty penalties, fines, and repayments if the IRS audits these claims.
- High Fees and Contingency Arrangements: Many consulting companies and ERC specialists charge businesses exorbitant fees, often a percentage of the amount recovered. This incentivizes these firms to maximize the claimed amount regardless of true eligibility, leaving business owners exposed to risk.
- IRS Warnings: The IRS has issued multiple warnings about fraudulent ERC claims and “ERC mills” that push businesses to apply for credits they aren’t eligible for. These mills often fail to explain the full risks associated with filing false or incorrect claims, including potential audits and legal actions.
Voluntary Disclosure of Improper ERC Claims? BIG is Here to Help.
If your business participated in the IRS Voluntary Disclosure Program and returned funds received from the Employee Retention Credit (ERC), you’ve already taken a crucial step to correct improper claims. But even after doing the right thing, many businesses find themselves facing ongoing challenges—and that’s where we step in. Burnett Injury Group in Annapolis can support you through ERC litigation issues by:
- Pursuing Recovery from Third-Party Firms: Many businesses were led astray by third-party companies promising ERC eligibility without fully explaining the rules or risks. At BIG, we hold these firms accountable for misrepresentation and malpractice. If they caused you to make improper claims, we’ll pursue financial recovery on your behalf.
- Protecting Your Business Reputation: Voluntarily disclosing and returning ERC funds shows integrity—but lingering implications can still hurt your business’s reputation. Our experienced attorneys can work to mitigate any further damage to your standing with customers, partners, and financial institutions.
- Reducing Potential Penalties and Interest: Although you’ve returned the funds, the IRS may still impose penalties and interest. We provide legal strategies and advocacy to minimize or eliminate these financial burdens, helping you achieve the best possible outcome.
- Guidance on Navigating IRS Audits: Even after participating in the disclosure program, your business could still face IRS scrutiny. We offer proactive legal guidance to ensure you’re fully prepared, protecting your rights and interests every step of the way.
Protecting Against ERC Scams
- Consult with Reputable Professionals: It’s crucial to work with legal professionals such as attorneys who have a strong understanding of the ERC program and compliance requirements. Be wary of firms charging fees based on a percentage of the ERC refund.
- Document All Claims: Keep thorough documentation and records to substantiate ERC claims in case of an audit.
Contact Our Annapolis Attorneys For Guidance Through ERC Litigation Issues
The ERC program was designed to help businesses during a challenging period, but due to its complexity and the sudden influx of claims, it has become a target for fraud and misrepresentation. If you have questions and want help to avoid falling victim to these schemes, contact Burnett Injury Group’s team of attorneys today. We can help you navigate ERC litigation issues in Annapolis.
