Resources
IRS News Release: Important Information for All Taxpayers Concerned with ERC
IR-2023-135, July 26, 2023
Here’s What the IRS Has to Say:
Warning signs of aggressive ERC marketing
There are important tips that people should be wary of involving the Employee Retention Credit. Warning signs to watch out for include:
- Unsolicited calls or advertisements mentioning an "easy application process."
Carrier Robins Response: Various sources refer taxpayer clients to us. Many come from long-term relationships. Many more come from public marketing efforts. Carrier Robins does not make “unsolicited calls”. Carrier Robins does work hard to make the process as easy and simple for the taxpayer as possible. It is not “easy” but our highly trained staff, professional tax preparers, and thoughtful systems make the process as straightforward as possible.
- Statements that the promoter or company can determine ERC eligibility within minutes.
Carrier Robins Response: Some screening can be done quite promptly.
It is possible, in some cases, to determine that a business is NOT eligible for the ERC in minutes:
- Businesses that did not exist in 2020 or 2021.
- Businesses with no W-2 employees.
- Businesses owned by and employing only close family members.
- Other disqualifying factors can frequently be detected promptly.
On the other hand, no one can determine eligibility for or the amount of credit “within minutes.” That’s because making these determinations properly, requires extensive documentation and examination of underlying financial, payroll, and tax records.
Which is why Carrier Robins has always conducted live interviews with qualified representatives of the taxpayer business to investigate many aspects of ERC eligibility not revealed by the numbers alone.
- Large upfront fees to claim the credit.
Carrier Robins Response: Carrier Robins does not accept referrals from any source requiring any upfront fee from any taxpayer business.
- Fees based on a percentage of the refund amount of Employee Retention Credit claimed. This is a similar warning sign for average taxpayers, who should always avoid a tax preparer basing their fee on the size of the refund.
Carrier Robins Response: Carrier Robins does not accept referrals or engagement from sources who charge their clients upfront fees. Instead, we offer two different safe, highly professional, predictable and transparent payment options for our services which are specifically designed to protect ourselves, our staff (and our clients) from exactly the sort of thing the IRS rightly expresses concern about in this bulletin:
- Direct Engagements: Sometimes clients are referred to us and hire our firm directly. For these direct engagements we do not charge an up-front fee. We only get paid when and if your company gets its refund. Our fee is based the complexity of your claim as measured by the number of employees whose ongoing employment we’re helping your company make an employee retention claim for.
It’s all spelled-out in plain English, up-front before you have to sign anything. So there are never any surprises.
And the attorneys and accountants who work for us are on-salary with modest productivity incentives based on the number of files analyzed, regardless of the size of the claim or outcome of their analysis.
- For Subcontract Work: The C.P.A.’s, business law firms, and other consultants who retain our services to assist them with their clients pay us a flat fee up-front that is earned regardless of the size of the claim or outcome of our research, analysis and advice to them about their client’s options.
We structure it this way precisely so that we can maintain our independence and avoid even the appearance of having any incentive to color outside the lines.
Each Carrier Robins tax professional is committed to serving every taxpayer to the highest attainable standard without any incentive to increase a quarterly refund or the number of quarters claimed. And the attorneys and accountants who work for us are on-salary with modest productivity incentives based on the number of files analyzed, regardless of the size of the claim or outcome of their analysis.
- Preparers refusing to sign the ERC return being filed by the business, exposing just the taxpayer claiming the credit to risk.
Carrier Robins Response: Carrier Robins professional tax preparers always sign all 941X tax returns as professional tax preparers. Carrier Robins always stands behind its professional tax preparation work.
- Aggressive claims from the promoter that the business receiving the solicitation qualifies before any discussion of the group's tax situation. In reality, the Employee Retention Credit is a complex credit that requires careful review before applying.
Carrier Robins Response: Carrier Robins employs a rigorous, multi-layered approach to ERC tax refund claims. Thorough review of all client-supplied documents by accounting personnel supervised by Certified Public Accountants. Cross-referenced fact-checking. Additional spot-checking of data. Computerized analysis to confirm positive trends and detect any untoward patterns.
Carrier Robins uses a unique, exclusive, centralized database of hundreds of governmental orders from all levels of government authority. This invaluable resource was created by investing thousands of hours by dozens of attorneys and paralegals to research, track down, characterize, and catalog federal, state, and local orders related to the COVID pandemic.
Following comprehensive analysis of financial statements, balance sheets, tax returns, profit-and-loss statements, employee lists, and payroll records, among others, our tax preparation professionals work with taxpayer company officials to accurately document the truth about the taxpayer business operations and performance, quarter by quarter, in 2019-2021.
Carrier Robins has invested the time, money, and intellectual horsepower necessary to make the ERC refund process as “easy” and “simple” as possible for the taxpayer who deserves their refund.
Carrier Robins continues to monitor IRS press releases and other communications to ensure continued compliance with IRS guidance and mandates.
Carrier Robins approach to ERC refunds has always been cautious and conservative. Carrier Robins has been pleased and gratified that it anticipated and avoided specific practices disparaged by the IRS through its warnings and advice over the past several months.
Carrier Robins tax preparers personally review all relevant information provided by the taxpayer and interview appropriate taxpayer officials and agents to develop an “Affirmation of Facts” document covering each quarter for which the ERC refund is claimed. The tax preparer then reviews this document with the taxpayer agent or official and obtains their signature.
As noted above, Carrier Robins limits its tax preparation professionals to licensed attorneys. Although the work they provide is limited to tax preparation, Carrier Robins believes that the intricacies of the ERC and the care required to successfully prepare an ERC case demand the highest level of skill and conscientious appreciation of the law. Without disparaging any other company’s use of off-shore tax preparers or individuals with brief, limited training, Carrier Robins is confident that our, admittedly extreme, approach produces the best, most reliable results.
- The IRS also sees wildly aggressive suggestions from marketers urging businesses to submit the claim because there is nothing to lose. In reality, those improperly receiving the credit could have to repay the credit – along with substantial interest and penalties.
Carrier Robins Response: Carrier Robins deplores “wildly aggressive” marketing that urges honest taxpayers to attempt “gaming the system”.
Carrier Robins forcefully discloses the consequences of misrepresenting information to obtain the undeserved ERC refunds.
Carrier Robins tax preparation professionals, while not practicing law in the ERC context, have many years of experience ferreting out fact from fiction.
- Unscrupulous promoters may lie about eligibility requirements, including refusing to provide detailed documents supporting their computations of the ERC. In addition, those using these companies could be at risk of someone using the credit as a ploy to steal the taxpayer's identity or take a cut of the taxpayer's improperly claimed credit.
Carrier Robins Response: Carrier Robins fully discloses and discusses eligibility requirements with taxpayers in writing, verbally, and through educational videos.
Carrier Robins routinely provides “detailed documents supporting [our] computations of the ERC” and we take the extra step of requiring taxpayer agents to certify the accuracy of the documents and statements upon which those computations are based.
Carrier Robins offices are physically located in the United States and street addresses are provided with all materials.
Carrier Robins seeks long-term relationships with its ERC refund clients, through comprehensive, reliable, accurate tax preparation services.
Carrier Robins also makes clear the need, on the part of many successful ERC refund claimants, to analyze the possibility of amended tax returns for 2020 and 2021.
Carrier Robins believes that American small businesses are the backbone of the American economy. Carrier Robins has seen that ERC refunds, properly justified, applied for, and received, have been a godsend to the deserving small businesses that have received these well-earned refunds.
