Facing an ERC Audit?
A team of tax attorneys and CPAs who provide ERC audit defense services to businesses facing an ERC audit
As part of its ongoing efforts to scrutinize Employee Retention Credit (ERC) refund claims, the Internal Revenue Service (IRS) has initiated a new phase of audits. In this latest wave, the IRS is sending Letter 6612 to employers whose ERC refund claims are still pending review. The primary objective of this scrutiny is to weed out ineligible claims through a comprehensive examination process conducted solely via correspondence.
Employers receiving Letter 6612 are required to submit a substantial amount of documentation within a stringent time frame – a mere 30 days from the date the IRS mails the letter. Failure to meet this deadline or request an extension will result in the IRS automatically disallowing the employer’s ERC claim in its entirety.
ERC Audit Process
ERC Audit Statute of Limitations
IRS Time Limits to Audit ERC (941/941-X) Filings (Current Law)
IRS Time Limits to Audit ERC (941/941-X) Filings
(If the Tax Reliefs for American Families and Workers of 2024 passes)
Q2 2020 - Q4 2020:
April 15, 2024 (with limited exceptions).
Q2 2021:
3 Years from the date the return was filed.
Q3 and Q4 2021:
5 Years from the date the return was filed.
Fraud:
No time limitation on audits.
IRS Time Limits to Audit ERC (941/941-X) Filings
(If the Tax Reliefs for American Families and Workers of 2024 passes)
Q2 2020 - Q4 2021:
6 Years from the Latest Of:
(1) The date on which the original return for the relevant calendar quarter is field,
(2) The date on which the return is treated as filed under present-law statute of limitations rules, or
(3) The date on which the credit or refund with respect to the ERC is made.
Fraud:
No limitation on audits.
How to Prepare for an ERC Audit
Ensure Your ERC Claim is Substantiated.
Consult a Tax Professional About Amending Applicable Income Tax Returns.
Ensure your ERC Filings are Substantiated
Information Documents Requests Issued in ERC Examinations May Include:
Forms 941 for quarters ending June 30, 2020; Sept. 30, 2020; Dec. 31, 2020; Dec. 31, 2020; March 31, 2020; June 30, 2021; Sept. 30, 2021; and Dec. 31, 2021;
Worksheet 1 or similar worksheet(s) used to compute the ERC included on the amended returns quarters ending June 30, 2020; Sept. 30, 2020; Dec. 31, 2020; March 21, 2021; June 30, 2021; Sept. 30, 2021; and Dec 31, 2021;
Payroll journals for March 2020 through December of 2021;
List of employees paid sick and/or family leave;
The dates employees were paid sick and/or family leave;
The amounts paid to each employee for sick and/or family leave;
Employee statements about the COVID-19-related reason why they requested leave and written support for that reason.
Recent IRS Warnings Regarding ERC Processors
ERC audits may result from discrepancies in claimed credits, documentation inconsistencies, or non-compliance with ERC eligibility criteria.
Mistakes by business owners such as inaccurate wage calculations, misinterpretation of eligibility requirements, poor record-keeping, or insufficient documentation can trigger audits, along with errors in financial reporting or failure to follow IRS guidelines and deadlines.
Reviews
About Us
Azarvand Tax Law is comprised of tax attorneys and CPAs who provide zealous ERC audit defense services to businesses under audit for their Employee Retention Credit (ERC) claims. Our bilingual staff breaks down language barriers for clients preferring to communicate in Spanish, Filipino, or Japanese, offering personalized support throughout the process. With a commitment to excellence, we achieve optimal outcomes for our clients while building lasting relationships based on trust and results. Reach us 7 days a week at Info@azarvandtaxlaw.com.
Our Team
Contact Us
Maryland
(by appointment only)
Annapolis
Silver Spring
Washington D.C.
(by appointment only)
Massachusetts Ave
Silver Spring
Tel: (410) 698 4005
Fax: (410) 698 4051
Info@AzarvandTaxLaw.com
Office Hours
Monday to Friday
9:00 am to 8:00 pm EST
Saturday and Sunday
By Appointment Only
