We have had good success in taking a hard look at the ERC claims made – and at times finding that while the company may not qualify at the level originally proposed with the previous provider – the company still may qualify for a lesser amount.

Obviously, in some cases we find that there is no support for the ERC claim. Here, we recommend that you take steps to get ahead of the problem – get expert advice and file an amendment either withdrawing the ERC claim and/or paying back the funds. Doing so will help go a long way to avoiding the big bill of additional penalties, interest and legal fees that can quickly pile up. But be sure to have someone reputable look at the claim before you determine to withdraw it.

It is also key to have your ducks in a row in terms of substantiating your eligibility for the ERC. We have seen – and the IRS guidance at Notice 2021-20 makes clear – that key is to create and maintain records that will show and prove the elements to qualify for ERC, including the following:

Documentation to show how the employer determined it was an eligible employer that paid qualified wages, including:

1) the actual government order that suspended the employer’s business operations.

2) any records that the employer relied up to determination more than a nominal portion of its operations were suspended due to the government order, or the order had more than a nominal effect on its business operations;

When it comes to the ERC — it won’t work to just run, hide and hope the IRS will go away. Best to face the music.