IRS Reveals Suspicious Signs It Looks For to Flag Incorrect or Fraudulent Tax Credit Claims

The Internal Revenue Service (IRS) has revealed a series of specific suspicious red flags that could trigger enforcement actions when it comes to mistaken or fraudulent applications for a pandemic-era tax credit. The IRS indicated in a March 20 notice that there are seven suspicious signs of a bad claim for the employee retention credit (ERC), which is a refundable tax credit designed for businesses that continued paying employees during COVID-19 shutdowns. The reason the agency is now revealing these telltale signs of incorrect or fraudulent ERC claims is because March 22 is the deadline to apply for a voluntary disclosure program that will let employers who filed bad claims avoid penalties and interest....