A short YouTube video by Donna Bordeaux warning businesses about companies that aggressively solicit Employee Retention Credit (ERC) claims without doing proper verification. Donna explains the basic revenue-decline thresholds for ERC, describes typical fee arrangements (often 20–25% of claimed credits), warns that taxpayers—not the solicitating firms—are liable if the IRS audits, and advises consulting a CPA and using trusted advisers.
Have you been contacted by a company that claims you may be eligible for the employee retention credit? There are a lot of companies who are out to find companies that haven't taken advantage of the employee retention credit right now. However, many of them are not doing the due diligence necessary to verify that you actually qualify for these credits. If you don't actually qualify and you get them now, that could cause you a lot of long term problems that you really want to avoid. The employee retention credit is based around the fact that you had to have had a 50% decline in revenue. If we're talking about 2020 or in 2021, a 20% decline in revenue. There are very specific rules that I won't go into on this video. We have several others about them. But many of these companies just go up and say, you're eligible for these employee retention credits, let's file and get them for you. They're typically charging a percentage of the credits that they are applying for you to get back, usually in the neighborhood of 20 to 25%. Now these are not CPA firms, not accountants. They're applying for credits. They're typically taking just one tax code and going out and finding it. Or they may take advantage of some other credits along the way. But the real issue is that these companies may not be around if you are questioned if the IRS audits those returns, you typically have to file a 941amended return to get the money back. And they're going to want their money to file these forms for you. And typically they're not going to wait for the IRS to give you your refund. The IRS is taking in their backlog situation, their good old time to get this money out. We're seeing refunds for employee retention credit. We're taking up to 18, 10 months to get those through. And some had to be resubmitted before they came through. So not a fast turnaround. My problem is that if they apply for these credits and maybe they tell you you qualify, but they don't. If the IRS comes back to audit you later on, you are the one on the hook, not them. And even if they say they provide audit protection, there is no guarantee that company will be around when that day comes. My guess is that most of them will have vaporized and not be around to support these later on. They're not always long term companies who are in the business of dealing with the irs. So if you think that you qualify for the employee retention credit, I strongly suggest you talk with your CPA to make that call. In our case, all of our clients were we reviewed and looked at what they qualified for and applied for Those credits in 2021 when these credits first came out. So if you have not, I'd be happy to chat with you to determine if you actually qualify. And you can also reference some of our other videos about this same topic. Just look up ERC or Employee Retention Credit, and we've got plenty of information out there or on our blog. But watch out. Make sure you don't become the victim of a scam. I'm Donna Bordeaux with pyopaccounting.com Please follow us on Facebook and Instagram. Make sure you check out our blog and our website from the link below. Subscribe to our YouTube channel and hit the bell to be notified when we post. To contact me, email Email me at donna at pyopaccounting. Com.
