With an estimated $2 trillion in fraudulent claims, the Employee Retention Program (ERC) has proven to be one of the most abused federal relief programs in U.S. history. While the ERC was initially intended to provide relief to struggling businesses during the COVID-19 pandemic, the IRS allowed businesses to file claims retroactively through late 2023 (when it imposed a moratorium so that it could focus additional resources on enforcement), and fraudulent promoters convinced many businesses to file claims even though they were ineligible to do so. The IRS is actively targeting ERC fraud in 2024, and for businesses facing audits and investigations, engaging an experienced Boston IRS tax attorney is critical for avoiding unnecessary consequences.

For most people, facing an IRS audit triggers fear of liability for back taxes, interest and penalties. However, IRS audits can also lead to criminal prosecution in some cases. With additional resources at its disposal in 2024, the Internal Revenue Service (IRS) is ramping up its enforcement efforts—and this includes its efforts to hold individual and corporate taxpayers criminally accountable when warranted. Learn more from Boston criminal tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group.

The Internal Revenue Service (IRS) has additional resources at its disposal in 2024, and it is using these resources to ramp up its enforcement efforts. The IRS has specifically signaled its intent to target businesses and their owners, placing particular emphasis on improper business deductions, payroll-related tax violations, Employee Retention Credit (ERC) fraud, and other fraudulent business tax practices. For businesses targeted in IRS tax audits, an informed and strategic approach is critical. This starts with engaging an experienced Boston business tax attorney to work with the IRS on your business’s behalf.

As the Internal Revenue Service (IRS) continues to crack down on Employee Retention Credit (ERC) fraud, it is advising businesses that improperly claimed the ERC to take advantage of the limited-time ERC Voluntary Disclosure Program (ERC VDP) or the claim withdrawal process before these options expire. Filing under the ERC VDP is an option for businesses that received refunds, while withdrawal is an option for businesses that still have invalid ERC claims pending. As Boston tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains, business owners who fail to pursue either of these options will face significant risks in the event that the IRS uncovers their invalid ERC claims in the future.

The U.S. House of Representatives has passed a bill aimed at ending the Employee Retention Credit (ERC) and enhancing the federal government’s ability to hold promoters and business owners accountable. While the ERC was a pandemic-era relief program, eligible businesses can still file claims retroactively (although the IRS currently has a moratorium on processing new claims), and the program proved to be a prime target for fraud. Here, Boston tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains what business owners in Massachusetts need to know: