IRS Announces Heightened Audits and Six Month Processing Times on New ERC Claims Due to Suspected Fraud
The Road Map to being IRS Audit Ready for Your ERC Payroll Tax Refund
By: Corporate Strategies, LLC
HOUSTON - Sept. 15, 2023 - PRLog -- On September 14, 2023 the IRS announced six month processing times on new ERC tax refund claims and heightened audits due to concerns about the fraudulent filing of ineligible ERC payroll tax refunds . https://www.irs.gov/
If you are concerned about unscrupulous service providers misleading you and want to avoid IRS repayment demands, penalties and interest assessments on your legitimate ERC tax refund claim in the event of a future audit, follow this IRS notice on the proper substantiation of your tax refund claim. You will sleep well at night, knowing the tax refund you have received is the one you will keep!"
IRS ERC NOTICES---Critical Document Substantiation Requirements
IRS Notice 2021-20 provides guidance to eligible employers about the records they should retain to substantiate eligibility for ERCs, located within Section N (Answer 70, 71.) Notice 2021-20 provides that the employer will have adequately substantiated eligibility for ERCs if the employer retains records that include the information listed below. (Answer 70.) Notice 2021-20 specifies that the documentation should be retained for five years from when the tax becomes due or is paid. (Answer 71.) Notice 2021-23 states that eligible employers must maintain documentation to support an employer's eligibility based on a decline in gross receipts, without providing any concrete examples of documentation. Notice 2021-20 provides this specific list of documentation to substantiate eligibility for ERCs:
o any governmental order to suspend the employer's business operations
o any records the employer relied upon to determine whether more than a nominal portion of its operations were suspended due to a governmental order or whether a governmental order had more than a nominal effect on its business operations
o any records the employer used to determine it had experienced a significant decline in gross receipts
o any records of which employees received qualified wages and in what amounts
o and in the case of a large eligible employer, work records and documentation showing that wages were paid for time an employee was not providing services.
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