ERC review
Aggressive promoters told tens of thousands of businesses they qualified for the Employee Retention Credit when they didn't. The IRS is now auditing. If you took ERC and aren't sure the claim was legitimate, we review the eligibility before the IRS does — and amend if needed.
What this is
The Employee Retention Credit was a real COVID-era refundable payroll tax credit — but the program was abused at massive scale. Pop-up 'ERC mills' promoted the credit to businesses that didn't qualify, charging contingent fees, and walked away with the commission while leaving the business holding the bag. The IRS is now actively auditing ERC claims and pursuing penalties for over-claimed amounts. If you took an ERC credit and weren't sure whether you actually qualified — or your preparer pushed it without explaining the eligibility tests — this is the work of reviewing it before the IRS does, and amending if needed.
What's involved
Each engagement starts with eligibility review. What happens next depends on what we find.
ERC review
Did the business actually meet one of the two qualifying tests — significant decline in gross receipts OR full/partial suspension of operations from a government order? Most over-claims fail the second test under closer review.
ERC review
If eligibility holds, are the wages claimed actually qualified wages? Owner wages, family-member wages, and wages paid with PPP funds have specific exclusions that ERC mills often ignored.
ERC review
If the claim was overstated, we file a 941-X to reduce or eliminate the credit before the IRS catches it. Voluntary withdrawal programs sometimes reduce penalties significantly.
ERC review
The IRS has run multiple ERC voluntary withdrawal and disclosure programs allowing businesses to return over-claimed amounts at reduced penalties. We help you assess and apply.
ERC review
If the IRS has already sent a letter (CP-181, CP-220J, or audit notices), we help you understand what's being asked and respond before deadlines run.
ERC review
For claims that DO hold up under review, we rebuild the supporting documentation — government order analysis, gross receipts schedules, qualified wage calculations — so it's ready if the IRS asks.
Why this is its own service
Most accountants who watched the ERC boom from the sidelines didn't claim it for their clients precisely because the rules were ambiguous and the promoters' interpretations were aggressive. Now the cleanup work needs a specific combination — payroll tax knowledge (Form 941), the actual eligibility rules and the various rule changes from 2020 through 2021, the IRS's voluntary disclosure mechanics, and an honest willingness to tell a client their prior claim was wrong. The work isn't glamorous, but the alternative — waiting for an IRS audit notice in 18 months — is more expensive and stressful. The voluntary disclosure programs are time-limited; reviewing now gives you the broadest set of options.
Common questions
Often paired with
Workers' comp audits
Every employer with workers' comp insurance gets audited every year.
ExploreQuarterly filings
If you have employees, you've got at least four recurring filings every quarter — federal 941, Minnesota withholding, Minnesota unemployment, and the year-end 940.
ExploreAnnual reports
Every Minnesota LLC and corporation has to file an annual renewal with the Secretary of State.
ExploreIf you took the credit and weren't sure about it, the time to review is before the letter, not after.