There are a number of companies offering to re-calculate the ERTC in exchange for a percentage of the “take.” Because of the lack of IRS guidance on the subject, some are taking a very liberal interpretation of the rules. They are not wrong in all cases, but many are interpreting the law in a way that I would not – and I would not sign (under penalties of perjury) an amended payroll tax return that requested some of the refunds they suggest.
A current client reports that a firm is telling them they’ve had a disruption in a significant part of their business due to government shut-downs. That is one of the criteria for ERTC, but in their case I think this is a major stretch … beyond what I am willing to sign on. But I’m not researching under this topic, and can’t say they are absolutely wrong.
The IRS does have a five-year statute of limitations on these ERTC claims (vs. three on most other items). They aren’t auditing claims now (yet), but could in the future. I don’t know at what point a claim like this that is later shown to be wrong goes from having a civil penalty to being criminal tax fraud. To the extent that they have an argument that they are correct, it shouldn’t be fraud. Specifically, a client is being offered over $1mil in refunds for what (in my opinion) are fraudulent claims. If you think about the limited resources the IRS has, they’d be significantly more likely to audit this one part of his business – checking on a huge refund request – as compared to a full-blown audit of the business.