Employee Retention Credit
Steve PerryThe **Employee Retention Credit (ERC)** was created during the pandemic to reward employers who kept staff on payroll despite business hardships. Eligible businesses either faced **government-mandated shutdowns** or saw **significant revenue declines** in 2020 and early 2021. **Recovery startup businesses** could also qualify for later quarters in 2021. While the credit—up to **\$26,000 per employee**—offered real relief, it came with strict eligibility rules and limitations, particularly for those who also claimed PPP forgiveness or other credits. Unfortunately, the ERC has become a **magnet for scams**. Aggressive marketers promise big refunds and “no payment unless you collect,” while failing to amend necessary tax returns or prepare clients for audits. The IRS has issued **multiple warnings** and listed ERC abuse as #1 on its **Dirty Dozen scams list**. With over **866,000 claims** submitted and **over \$1 billion** in potentially fraudulent filings under investigation, the IRS is cracking down hard. Some offenders are already facing **federal charges and prison time**. ERC audits can be long and intrusive—especially if **fraud is suspected**, since that removes any time limit on IRS review. To avoid disaster, businesses should work only with **qualified professionals**. At **Books, Taxes & More**, we carefully assess ERC eligibility and stand by our clients throughout the process.