The IRS issued a news release on October 19 warning about third parties falsely recommending employers to claim the Employee Retention Credit when they may not meet qualifications.

“The Internal Revenue Service today warned employers to be wary of third parties who are advising them to claim the Employee Retention Credit (ERC) when they may not qualify. Some third parties are taking improper positions related to taxpayer eligibility for and computation of the credit.

These third parties often charge large upfront fees or a fee that is contingent on the amount of the refund and may not inform taxpayers that wage deductions claimed on the business’ federal income tax return must be reduced by the amount of the credit.”

For more information, see IR-2022-183.