5 Key Facts for Business Owners Targeted in IRS ERC Tax Audits and Investigations in 2024

Posted in Offshore Account Update on April 12, 2024 | Share

The Internal Revenue Service (IRS) is continuing to aggressively target Employee Retention Credit (ERC) fraud in 2024. With numerous audits and investigations pending, the IRS is continuing to launch new inquiries at record pace. These inquiries present substantial risks, and for targeted businesses and their owners, engaging an experienced Washington D.C. IRS tax lawyer is a key first step toward avoiding unnecessary consequences.

What Business Owners Need to Know About the IRS’ Ongoing Efforts to Combat ERC Fraud

What do you need to know if you are facing an IRS ERC tax audit or investigation in 2024? Here are some key considerations from Washington D.C. IRS tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group:

1. IRS ERC Tax Audits and Investigations Present Substantial Risks

As noted above, IRS ERC tax audits and investigations present substantial risks. Not only can targeted businesses and their owners face liability for back taxes (including repayment of refunded credits), interest and penalties, but they can also face criminal charges in some cases.

2. Voluntary Disclosure is No Longer an Option

Once the IRS launches an audit or investigation, voluntary disclosure is no longer an option. While businesses (and business owners) that aren’t yet facing scrutiny may be able to minimize their liability through the IRS’ Voluntary Disclosure Practice (VDP)—or perhaps through ERC withdrawal—an audit or investigation takes these options off of the table.

3. Ignorance or Inadvertence Is Not a Complete Defense

While evidence of a willful attempt to fraudulently claim the ERC is required for federal prosecutors to pursue criminal charges, even inadvertent false ERC claims can expose businesses (and their owners) to liability for back taxes, interest and penalties. This is critical to keep in mind when deciding how best to deal with the IRS during an ERC tax audit or investigation.

4. The IRS May Already Have Apparent Evidence of ERC Fraud

By the time you learn that you are facing ERC-related scrutiny from the IRS, there is a good chance that the IRS already has apparent evidence of fraud in its possession. Knowing what evidence the IRS has in its possession already (in addition to what the IRS is likely to find) is critical for making informed decisions about your defense.  

5. Facing an Audit or Investigation Does Not Mean You Are Guilty of ERC Fraud

The fact that the IRS has decided to launch an audit or investigation does not mean that you are guilty of ERC fraud. There are several defenses to ERC fraud allegations—including defenses that an experienced Washington D.C. IRS tax lawyer will be able to help you assert regardless of the facts at hand.

Schedule an Appointment with Washington D.C. IRS Tax Lawyer Kevin E. Thorn

Are you facing an IRS ERC tax audit or investigation? If so, we encourage you to contact us promptly for more information. To schedule an appointment with Washington D.C. IRS tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, call 202-349-4033 or tell us how we can reach you online today.

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