The Employee Retention Credit (ERC) was designed as a lifeline for businesses during the COVID-19 pandemic, providing much-needed relief to employers who kept their workforce intact during tough times. However, the complexity of this tax provision, coupled with aggressive and sometimes misleading marketing, has led to a wave of improper claims, with many businesses now facing disallowances from the IRS.

Recently, the IRS has intensified its efforts to curb improper payments, issuing 28,000 disallowance letters to businesses whose ERC claims showed a high risk of being incorrect. While these measures are crucial for maintaining the integrity of the tax system, they have also resulted in some legitimate claims being denied. If your ERC claim has been denied, O & G Tax and Accounting Services is here to help.

Our Solution: Expert Representation and a Second Review of Your ERC Claim

At O & G Tax and Accounting Services, we understand how frustrating it can be to receive a disallowance letter from the IRS, especially if you claimed the credit in good faith. That’s why we offer a second review of your ERC claim to ensure that it was properly evaluated. Our team of experts will meticulously review your claim, looking for any errors or oversights that may have led to its denial. If we find that your claim was incorrectly disallowed, we will represent you in the appeal process, working diligently to retrieve the credit you are entitled to.

7 Suspicious Signs an ERC Claim Could Be Incorrect

The IRS has identified several red flags that could indicate an incorrect ERC claim. Understanding these can help you avoid costly mistakes:

• Too Many Quarters Being Claimed: Some promoters have urged employers to claim the ERC for all quarters that the credit was available. Qualifying for all quarters is uncommon, and this could be a sign of an incorrect claim. Employers should carefully review their eligibility for each quarter.
• Government Orders That Don’t Qualify: Promoters may tell employers they can claim the ERC if any government order was in place in their area, even if their operations weren’t affected or if they chose to suspend their business operations voluntarily. This is false. Employers must ensure that the government order directly affected their operations due to COVID-19 and was not merely a recommendation or guidance. Additionally, some promoters suggest that an employer qualifies based on communications from the Occupational Safety and Health Administration (OSHA), which is generally not true.
• Too Many Employees and Wrong Calculations: Claiming the ERC for all wages paid to every employee on the payroll without considering the law’s changes throughout 2020 and 2021 can lead to overclaiming. Employers need to meet specific rules for qualified wages, depending on the tax period.
• Business Citing Supply Chain Issues: Qualifying for ERC based on a supply chain disruption is very uncommon. A supply chain disruption alone doesn’t qualify an employer for ERC. Employers must ensure that their supplier’s government order meets the necessary requirements.
• Business Didn’t Pay Wages or Didn’t Exist During Eligibility Period: Employers can only claim ERC for periods when they paid wages to employees. Claims made for periods before the business had an employer identification number or without paying wages are invalid.
• Promoter Says There’s Nothing to Lose: Businesses should be wary of promoters who urge them to claim ERC because they “have nothing to lose.” Incorrect claims can result in repayment requirements, penalties, interest, audits, and potential legal expenses.

How We Can Help

At O & G Tax and Accounting Services, we specialize in tax resolution and representation. We offer a thorough review of your ERC claim to identify any mistakes or oversights that may have led to the denial. If we find that your claim was improperly disallowed, we will represent you in the appeal process, working diligently to retrieve the credit you are entitled to. However, it’s important to note that while we will do our best to represent you if you have good reasons and justification for claiming the credit, the final decision ultimately lies with the IRS. Additionally, the decision to abate or wipe off penalties will continue to be at the sole discretion of the IRS. We encourage any taxpayer who claimed the credit in good faith, or those who believe that the denial was an error, to contact us.

For cases where penalties have been imposed, we will assist in crafting a compelling reasonable cause statement or provide other forms of tax representation to help reduce or abate these penalties. However, it’s crucial to understand that, despite our best efforts, the decision to abate or wipe off penalties remains at the sole discretion of the IRS. Additionally, our services do not extend to those currently under criminal or promoter investigations. We strongly advise individuals in these situations to seek immediate assistance from a qualified criminal or tax attorney.

Our goal is to ensure that every business receives fair treatment and that legitimate claims are honored. The ERC program was designed to provide crucial support to businesses during the pandemic, and we are committed to helping you secure the relief you deserve.

Frequently Asked Questions (FAQs) About Our ERC Representation Services

• What is the Employee Retention Credit (ERC)? The ERC is a refundable tax credit designed to help businesses keep employees on their payroll during the COVID-19 pandemic. It is one of the most complex tax provisions ever administered by the IRS, leading to a significant number of improper claims and subsequent denials.
• My ERC claim was denied. Can O & G Tax and Accounting Services help me? Yes, our firm specializes in reviewing denied ERC claims to determine if the denial was justified. We will ensure that your claim does not contain any of the common red flags that the IRS is focusing on. If we find that your claim was improperly disallowed, we will represent you in the appeal process to recover any legitimate credit you are entitled to.
• What are some red flags that could make my ERC claim incorrect? The IRS has identified several red flags, including claiming for too many quarters, citing non-qualifying government orders, incorrect employee wage calculations, and claims based on supply chain issues without proper qualification. If any of these apply to your claim, we can help you review and correct it.
• What if I received penalties along with my denial? If you received penalties as a result of your ERC claim, we can assist in crafting a reasonable cause statement or provide other forms of tax representation to help reduce or abate these penalties. However, the final decision to abate or reduce penalties remains solely with the IRS.
• Are there any cases you won’t take on? Yes, our services do not include representation for those currently under criminal or promoter investigations. If you are in this situation, we strongly advise you to seek the help of a competent criminal or tax attorney.
• How do I know if my ERC claim was improperly denied? Our experienced team will conduct a thorough review of your ERC claim to identify any mistakes or oversights that may have led to the denial. We will also check for any of the suspicious signs identified by the IRS. If we find that your claim was improperly denied, we will guide you through the appeals process.
• How long does the appeal process take? The duration of the appeal process can vary depending on the complexity of the case and the IRS’s current workload. However, our team will work efficiently to ensure that your case is handled in the most efficient manner.
• What should I do if I receive a disallowance letter from the IRS? If you receive a disallowance letter, contact O & G Tax and Accounting Services immediately. We will review your case and advise you on the best course of action, focusing on correcting any potential red flags and ensuring your claim is accurate.

If your Employee Retention Credit claim has been denied, don’t leave money on the table. At O & G Tax and Accounting Services, we are committed to helping businesses like yours navigate the complex ERC landscape and secure the relief you deserve. We encourage any taxpayer who claimed the credit in good faith, or those who believe that the denial was an error, to reach out to us.

To ensure a smooth process, we advise you to use our appointment scheduler to book a time for an overview and discovery session with our team. Contact us today to schedule a consultation and let our experienced team review your ERC claim. We are here to represent you in the appeals process and ensure that your business receives the support it needs.