IRS Targets Employee Retention Credit (ERC) Scams as Number 1 on its Dirty Dozen List for 2023.
Each year the IRS publishes a Dirty Dozen list of tax scams that it plans to target in upcoming
audits. This year the IRS spotlighted Employee Retention Credits (ERCs). The public has literally
been bombarded with radio and internet ads in the last 12 months by promoters attempting to con
ineligible businesses into claiming the credit. These promotions mislead businesses into thinking
they are eligible for the credit, which was only valid during the pandemic for a limited group of
businesses. Worse yet, most of the promoters charge upfront fees for filing the refund claims, but
the claims can take years to materialize, if ever. The IRS Office of Professional Responsibility
issued a special bulletin (OPR Issue 2023-02) on March 7, 2023 reminding tax professionals of
their responsibilities for ERC claims under Circular 230, which is their guide to practice before
the IRS. The IRS also warns businesses that they are ultimately responsible for the accuracy of the
information on their tax return. News Release IR 2023-49.