The IRS has stepped up its efforts to review Employee Retention Credit (ERC) claims, sending notifications to thousands of companies about inappropriate claims. This scrutiny underlines the importance of ensuring that your business is correctly complying with current regulations to avoid legal and financial complications.

Importance of a Correct Claim

A correct claim not only ensures that the available tax benefits are taken advantage of, but also protects against the risk of audits and sanctions. With the IRS announcement on a second ERC Voluntary Disclosure Program, companies have the opportunity until November 22, 2024, to correct past errors by paying 85% of the credit received, without facing additional fines or interest.

Consequences of Incorrect Claims

The consequences of non-compliance can be severe, including substantial fines and the accumulation of interest. The IRS has been clear in its intention to closely follow claims and act accordingly against incorrect statements.

Steps to Follow for Conformity

1. Claims Review: Verify your ERC claims using IRS resources, such as the eligibility checklist and FAQs available on their website.
2. Respond to Notifications: If you receive a denial letter from the ERC, it is crucial to respond properly by following the instructions in Letter 105-C to resolve any discrepancies.
3. Consider Claim Withdrawal: The IRS offers the option to withdraw pending claims without incurring fines or interest, providing a window to correct errors before they incur additional costs.
4. Professional Advice: Consult with experts who can help you navigate these processes and ensure that your claims comply with current requirements.

How Regio Management Can Help

At Regio Management, we are committed to guiding companies through the complexities of the ERC and ensuring that they take advantage of these credits effectively and in accordance with the law. Our team of experts can help you review your claims, respond to IRS notifications and take advantage of disclosure programs to rectify any past errors without facing severe penalties.

Executive Summary

• Active IRS Review: Importance of complying with ERC regulations.
• Consequences: Risk of fines and interest for incorrect claims.
• Correction Opportunity: Possibility of adjusting claims through the second ERC Voluntary Disclosure Program.
• Steps for Compliance: Review of claims and appropriate response to IRS notifications.

Regio Management Support: Expert assistance to ensure compliance and optimization of tax benefits.