Every year, the Internal Revenue Service (IRS) releases a list of the top tax scams. Known as the “IRS Dirty Dozen,” this list serves as a warning to taxpayers about the most common and egregious tax-related schemes being used to defraud them.

Beward of Scammers!

This year’s list includes some familiar scams as well as some new ones, including Employee Retention Credit (ERC) scams.

The Employee Retention Credit (ERC) was created to provide financial relief to eligible employers affected by COVID-19-related shutdowns. However, the IRS has seen a significant increase in the number of fraudulent ERC claims. Those claims prompted the IRS to add ERC-related scams to the Dirty Dozen.

The agency is encouraging taxpayers to only work with reputable tax professionals and be wary of promoters promising unrealistic returns or offering to prepare and file claims for a fee. These promoters are often targeting small businesses through aggressive advertising campaigns, misleading owners into thinking they can claim these credits.

The reality is that many of these claims are made fraudulently and can lead to severe consequences for taxpayers. While the credit has provided a financial lifeline to millions of businesses, it is not applicable to everyone. There are very specific guidelines that must be followed for a legitimate claim.

The IRS is stepping up enforcement action involving ERC claims, and reminding taxpayers that they are responsible for the accuracy of their tax returns, even if a tax professional prepares them. Taxpayers should review their returns carefully before filing and ask their tax professionals any questions they have about the accuracy of their claims.

The ERC can be a valuable source of financial relief for eligible employers. But it’s essential for taxpayers to be cautious and vigilant and educate themselves about all the Dirty Dozen scams to protect their finances and avoid becoming victims.

If you’re a small business owner who needs help with your ERC claims, it’s important to work with a trusted professional who has experience in tax preparation. Miami CFO has helped many businesses file valid ERC claims and can assist you in navigating the complex guidelines to ensure you’re not falling for a scam.

Schedule a meeting with us today by clicking on this link: https://calendly.com/miami-cfo/.