Juan F. Vasquez, Jr., Tania Albuja and Victor Viser's article on "ERC Audits and the IRS’s $80 Billion Cash Infusion" in Tax Notes Federal
In a recent Tax Notes article, Juan F. Vasquez, Jr., shareholder and Co-Chair of Chamberlain Hrdlicka’s Tax Controversy & Litigation practice, Tania Albuja and Victor Viser, associates in our Houston and San Antonio Tax Controversy & Litigation groups, discuss the IRS’s plans to step up enforcement of improper Employee Retention Credit (ERC), following the passage of the Inflation Reduction Act, which will provide $80 billion of funding to the agency and the need for employers to evaluate their eligibility and credit amount now, before they face IRS’s scrutiny.
ERC is one of the most popular relief measures implemented in response to the COVID-19 pandemic. However, it has recently been the source of significant confusion among employers, due to various changes made to the legislation once the measure was implemented, which have resulted in unclear eligibility rules and retroactive changes.
“Given this perfect storm of employer confusion over the ever-changing ERC rules and looming IRS audits, employers should take proactive measures to ensure that they are eligible for the ERC and have properly calculated the credit amount,” said Vasquez, Albuja and Viser. “Because the IRS is poised to increase its enforcement of ERC claims, now is the time for those that have already claimed the ERC or that intend to claim it to evaluate their eligibility and credit amount. Employers that don’t will be vulnerable to extensive audits and potential litigation.”
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