Experienced Legal Representation for High-Stakes ERC Fraud Matters
Holding business owners and others accountable for Employee Retention Credit (ERC) fraud is a top federal law enforcement priority. With official estimates putting the cost of ERC fraud above $2 trillion, it’s not hard to see why. ERC fraud investigations are moving swiftly, and federal prosecutors are pursuing substantial penalties in these cases.
ERC Fraud Investigations Can Lead to Serious Criminal Charges
Allegations of ERC fraud can lead to serious criminal charges. Several federal criminal statutes can come into play depending on the allegations involved—all of which include provisions for six or seven-figure fines and years or decades of federal incarceration.
As a result, experienced legal representation is critical. If you are under investigation or facing charges for ERC fraud, it is imperative that you speak with an experienced defense lawyer as soon as possible. When you engage an experienced defense lawyer, one of your lawyer’s first priorities will be to discern the specific allegations against you. These allegations may include:
- Misrepresenting a business entity’s eligibility for the ERC
- Falsifying payroll records or other documents for purposes of fraudulently claiming the ERC
- Claiming the ERC for non-qualifying wages
- Improperly calculating the ERC in one or more calendar quarters
- Exceeding the maximum ERC credit in one or more calendar quarters
Many business owners struggled to understand their eligibility for the ERC. The eligibility rules changed several times during the COVID-19 pandemic, and businesses needed to calculate their credits differently for different quarters during both 2020 and 2021. As a result, many business owners made mistakes. As the IRS has acknowledged, many business owners fell victim to ERC filing scams both during and after the pandemic as well.
However, while the IRS is providing limited forms of relief to eligible businesses, it has made very clear that it intends to hold all fraudulent ERC filers accountable if they fail to proactively remedy their mistakes. While this will mean imposing civil liability in some cases, a substantial percentage of ERC fraud investigations are culminating in criminal charges.
Withdrawal Isn’t the Best Option (and Isn’t an Option At All) in Many Cases
In late 2023, the IRS announced that it was launching a voluntary withdrawal program for businesses that may have submitted fraudulent ERC claims. However, not all businesses qualify; and, even among those that do, filing for withdrawal won’t be the best option in all scenarios. Filing for withdrawal does not guarantee immunity from prosecution, and the IRS is scrutinizing the returns of businesses that file to withdraw their invalid ERC claims.
Request a Confidential ERC Fraud Consultation at Brown, P.C.
We represent business owners and others in high-stakes ERC fraud matters. If you are under investigation or facing charges, or if you have questions about what you can do to avoid federal scrutiny, you can call 888-870-0025 or contact us online to request a confidential consultation.