Responding to an ERC Subpoena

Experienced IRS Tax Lawyer for ERC Subpoena Response  

If you have received an employee retention credit (ERC) subpoena, this could mean one of two things—either: (i) the federal government believes that you have information about ERC fraud perpetrated by a third party, or (ii) the federal government believes that your business (or you personally) have engaged in ERC fraud. In either scenario, you need to take the subpoena very seriously, and it is strongly recommended that you engage experienced defense counsel to assist with your response.

Uncovering and prosecuting ERC fraud has become a top federal law enforcement priority. ERC fraud is one of several forms of pandemic-related fraud that has cost the federal government billions of dollars in taxpayer funds in recent years. To uncover ERC fraud, federal authorities have several investigative tools at their disposal, including their authority to issue subpoenas to suspects, targets, and third-party witnesses.

What You Need to Know When You Receive an ERC Subpoena

All recipients of ERC subpoenas must be careful to avoid mistakes that could lead to prosecution. Even if you are not currently the subject of a federal investigation, sharing information with the government could lead to scrutiny, and failing to respond to the subpoena appropriately could lead to contempt charges. With this in mind, here are some key facts you need to know if you have received an ERC subpoena from IRS Criminal Investigation (IRS CI) or another federal agency:

  • Is the government treating you (or your business) as a suspect, target, or witness? While all ERC subpoenas need to be handled carefully, responding as a witness is very different from responding as the suspect or target in an ERC fraud investigation.
  • What is the deadline to respond? The subpoena will specify a response date. You will need to make sure you do what is necessary to submit a compliant response by the government’s deadline.
  • What do you need to do to timely comply with the subpoena? Submitting a compliant response to an ERC subpoena can be a substantial undertaking. To avoid missing the deadline, you will need to begin working with counsel to develop a response strategy immediately.
  • Can (and should) you file a motion to quash? In parallel with beginning their response efforts, ERC subpoena recipients should also work with their counsel to determine if they have grounds to file a motion to quash. Alternatively, it may be possible to negotiate the scope of the subpoena with the issuing agency to avoid an undue (and untenable) compliance burden.

Protecting Your Business (and Yourself) if You Have Received an ERC Subpoena

While responding to an ERC subpoena presents substantial risks, there are steps that subpoena recipients can—and should—take to protect their businesses (and themselves). At Thorn Law Group, we have significant experience representing clients in ERC fraud investigations and other high-stakes federal tax fraud matters, and we can use this experience to guide you forward.

Contact an IRS Tax Lawyer About Your ERC Subpoena Today

If you have received an ERC subpoena, we strongly encourage you to call Kevin E. Thorn, Managing Partner of Thorn Law Group, for more information. To arrange a confidential consultation with an IRS tax lawyer at Thorn Law Group, call 202-349-4033 or contact us confidentially online today.

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