Did you know that of the 30 million small and medium businesses registered in the U.S., less than 1 million have effectively applied for and obtained their refunds through the Employee Retention Credit. While this may initially sound like a significant achievement, it is important to consider that this success has been achieved over a period of 2 years since the law’s implementation. With less than 2 years remaining until the official April 15 deadline, it is evident that a considerable number of businesses are at risk of missing out on their ERC refunds, outnumbering those who have successfully accessed this benefit..
What could be contributing to the lack of interest in the ERC? It’s a no-brainer, at first glance it does sound too good to be true: the government reimburses you for wages paid during the COVID-19 pandemic, as long as you meet the eligibility requirements. Another contributing factor is CPAs, accountants, bookkeepers, and CFOs are already swamped with their normal workload and due to the complexity of the laws are, in most cases, trying to avoid the subject to the detriment of their clients.
Combined with this, unqualified advisors are spreading unwarranted fear about potential audits or claims related to refunds. It’s crucial to remember that, like any government program, following the rules ensures a smooth process, while non-compliance can lead to consequences. This underscores the importance of consulting qualified ERC professionals who possess factual knowledge rather than mere opinions.
Congress recently instructed the IRS to more than double their output of ERC credits to clear the current almost yearlong backlog of refunds by August. There on they are to adhere to a 3-month turnaround as businesses are suffering while waiting for their refunds. Congress and the IRS want deserving businesses to benefit from the refund.
Companies seriously seeking their full due refunds are left with no choice but to turn to ERC specialist companies but sadly all ERC Specialist companies are not the same. Some errors are too much on the side of caution or even laziness only qualifying on revenue reduction, which leads to the client missing out on their full refund. Others altogether throw caution to the wind with the client applying for far too much and suffers the consequences of having to pay back the refund with interest and penalties. Choosing the right specialist firm is vitally important.
Although the process of filing for the ERC may seem straightforward, ensuring accurate and optimized filings that adhere to the IRS guidelines can be a challenging endeavor. Achieving the delicate balance of maximizing your refund while staying compliant is best entrusted to experienced professionals in the field.
Evaluating and vetting any ERC company before engaging them is a must. The following questions are the bare minimum that should be asked,
- How secure is your document intake portal? Nobody wants sensitive business documents getting into the wrong hands.
- Do you qualify on all allowable criteria including shutdowns and supply chain disruptions? Some just qualify on revenue reduction alone.
- Do you have a substantiation process? Some don’t.
- How does your substantiation process work?
- Will I get a full copy and explanation of my case and substantiation on completion?
- Can I get an independent Legal Letter of Opinion to ensure that I am not exposed in any way?
If you have any inquiries or concerns regarding your refund, don’t hesitate to reach out to ClearERC. Our team of dedicated ERC CPAs and Tax Advisors, supported by advanced technology solutions, is here to assist you with all aspects of ERC regulations and filing. Contact us today at our head offices in Winter Park, Florida to learn more about maximizing your ERC refund