IRS Includes ERC Promoters and “Offer Mills” in 2023 “Dirty Dozen” List

Each year, the IRS warns Taxpayers in its “Dirty Dozen” list of tax scams to be on the lookout.   This year, the list includes two warnings about which we have had similar concerns.

This year’s first addition to the “Dirty Dozen” list was Employee Retention Credit (“ERC”) promoters using aggressive marketing to assist taxpayers in applying for the credits.  Originally enacted as part of the CARES Act, the ERC allows significant credits against employment taxes for those businesses effected by COVID-19 related shutdowns, or who had a significant decline in gross receipts during the pandemic.  The IRS warns:

Businesses need to think twice before filing a claim for these credits. While the credit has provided a financial lifeline to millions of businesses, there are promoters misleading people and businesses into thinking they can claim these credits. There are very specific guidelines around these pandemic-era credits; they are not available to just anyone. People should remember the IRS is actively auditing and conducting criminal investigations related to these false claims. We urge honest taxpayers not to be caught up in these schemes.

Later, the IRS added so-called “Offer Mills” to the “Dirty Dozen” list.  Also using aggressive marketing campaigns (usually prompted by the filing of a Notice of Federal Tax Lien), these companies charge significant up-front, non-refundable fees with the promise of helping Taxpayers settle their tax debts “for pennies on the dollar.”  Too often, these companies file Offers in Compromises for Taxpayers who have no chance of having their offer accepted.

The moral of these warnings: be wary of the marketing and heavy-handed sales tactics of those who promise tax savings that seem “too good to be true.” Usually, they are exactly that, needlessly using much-needed resources and causing greater problems down the line. 

There is no substitute for qualified professionals like the attorneys at Anderson & Jahde to give you an honest assessment about whether you qualify for these types of programs.

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