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ERC Audit Lawyers

April 3, 2024

ERC Audit Lawyers: Navigating the Complex World of Employee Retention Credit Audits

If your business claimed the Employee Retention Credit (ERC) during the COVID-19 pandemic, you may find yourself facing an audit by the IRS. This can be a daunting prospect, but with the help of experienced ERC audit lawyers, you can navigate the process with confidence. In this article, we’ll explore what you need to know about ERC audits and how our federal lawyers at Federal Lawyers can help protect your interests.

Understanding the Employee Retention Credit

The Employee Retention Credit was introduced as part of the CARES Act in 2020 to help businesses keep employees on their payroll during the economic downturn caused by the pandemic. Eligible employers could claim a refundable tax credit of up to $5,000 per employee in 2020 and up to $7,000 per employee per quarter in 2021. However, the rules surrounding the ERC were complex and changed several times, leading to confusion and potential errors in claiming the credit.

Why You Might Face an ERC Audit

The IRS has announced that it will be closely scrutinizing ERC claims to ensure that businesses complied with the eligibility requirements and calculated the credit correctly. Some common reasons why your business might face an ERC audit include:

  • Claiming the credit without meeting the eligibility criteria
  • Miscalculating the credit amount
  • Failing to maintain proper documentation to support your claim
  • Claiming the credit for employees who were not actually retained
  • Double-dipping by claiming both the ERC and Paycheck Protection Program (PPP) loans for the same wages

If the IRS determines that you claimed the ERC improperly, you may be required to pay back the credit plus interest and penalties. In some cases, you could even face criminal charges for tax fraud. That’s why it’s crucial to have experienced ERC audit lawyers on your side.

What to Expect During an ERC Audit

If your business is selected for an ERC audit, you’ll typically receive a notice from the IRS requesting additional information and documentation to support your claim. This may include:

  • Payroll records showing the wages paid to each employee
  • Documentation of your business’s decline in gross receipts or suspension of operations due to government orders
  • Proof that you maintained the same number of full-time employees or paid them at least 80% of their normal wages
  • Records of any PPP loans or other COVID-19 relief funds received

The IRS may also request an interview with you or your representatives to discuss your ERC claim in more detail. It’s important to have your ERC audit lawyers present during any such interviews to ensure that your rights are protected and that you don’t inadvertently say anything that could harm your case.

How Our Federal Lawyers Can Help

At Federal Lawyers, our team of experienced ERC audit lawyers is here to help you navigate the complex world of federal tax audits. We can:

Christine Twomey
Christine Twomey
2024-03-21
Just had my Divorce case settled 2 months ago after having a horrible experience with another firm. I couldn’t be happier with Claire Banks and Elizabeth Garvey with their outstanding professionalism in doing so with Spodek Law Group. Any time I needed questions answered they were always prompt in doing so with all my uncertainties after 30 yrs of marriage.I feel from the bottom of my heart you will NOT be disappointed with either one. Thanks a million.
Brendan huisman
Brendan huisman
2024-03-18
Alex Zhik contacted me almost immediately when I reached out to Spodek for a consultation and was able to effectively communicate the path forward/consequences of my legal issue. I immediately agreed to hire Alex for his services and did not regret my choice. He was able to cover my case in court (with 1 day notice) and not only was he able to push my case down, he carefully negotiated a dismissal of the charge altogether. I highly recommend Spodek, and more specifically, Alex Zhik for all of your legal issues. Thanks guys!
Guerline Menard
Guerline Menard
2024-03-18
Thanks again Spodek law firm, particularly Esq Claire Banks who stood right there with us up to the finish line. Attached photos taken right outside of the court building and the smile on our faces represented victory, a breath of fresh air and satisfaction. We are very happy that this is over and we can move on with our lives. Thanks Spodek law 🙏🏼🙏🏼🙏🏼🙏🏼🙌🏼❤️
Keisha Parris
Keisha Parris
2024-03-15
Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.
Taïko Beauty
Taïko Beauty
2024-03-15
I don’t know where to start, I can write a novel about this firm, but one thing I will say is that having my best interest was their main priority since the beginning of my case which was back in Winter 2019. Miss Claire Banks, one of the best Attorneys in the firm represented me very well and was very professional, respectful, and truthful. Not once did she leave me in the dark, in fact she presented all options and routes that could possibly be considered for my case and she reinsured me that no matter what I decided to do, her and the team will have my back and that’s exactly what happened. Not only will I be liberated from this case, also, I will enjoy my freedom and continue to be a mother to my first born son and will have no restrictions with accomplishing my goals in life. Now that’s what I call victory!! I thank the Lord, My mother, Claire, and the Spodek team for standing by me and fighting with me. Words can’t describe how grateful I am to have the opportunity to work with this team. I’m very satisfied, very pleased with their performance, their hard work, and their diligence. Thank you team!
Anthony Williams
Anthony Williams
2024-03-12
Hey, how you guys doing? Good afternoon my name is Anthony Williams I just want to give a great shout out to the team of. Spodek law group. It is such a honor to use them and to use their assistance through this whole case from start to finish. They did everything that they said they was gonna do and if it ever comes down to it, if I ever have to use them again, hands-down they will be the first law office at the top of my list, thank you guys so much. It was a pleasure having you guys by my side so if you guys ever need them, do not hesitate to pick up the phone and give them a call.
Loveth Okpedo
Loveth Okpedo
2024-03-12
Very professional, very transparent, over all a great experience
Bee L
Bee L
2024-02-28
Amazing experience with Spodek! Very professional lawyers who take your case seriously. They treated me with respect, were always available, and answered any and all questions. They were able to help me very successfully and removed a huge stress. Highly recommend.
divesh patel
divesh patel
2024-02-24
I can't recommend Alex Zhik and Spodek Law Firm highly enough for their exceptional legal representation and personal mentorship. From the moment I engaged their services in October 2022, Alex took the time to understand my case thoroughly and provided guidance every step of the way. Alex's dedication to my case went above and beyond my expectations. His expertise, attention to detail, and commitment to achieving the best possible outcome were evident throughout the entire process. He took the time to mentor me, ensuring I understood the legal complexities involved to make informed decisions. Alex is the kind of guy you would want to have a beer with and has made a meaningful impact on me. I also want to acknowledge Todd Spodek, the leader of the firm, who played a crucial role in my case. His leadership and support bolstered the efforts of Alex, and his involvement highlighted the firm's commitment to excellence. Thanks to Alex Zhik and Todd Spodek, I achieved the outcome I desired, and I am incredibly grateful for their professionalism, expertise, and genuine care. If you're in need of legal representation, look no further than this outstanding team.
  • Review your ERC claim to identify any potential issues or areas of concern
  • Gather and organize the necessary documentation to support your claim
  • Represent you in communications with the IRS and advocate for your interests
  • Negotiate a favorable resolution to your audit, such as a reduced penalty or payment plan
  • Defend you in court if necessary to protect your rights and reputation

Our federal lawyers have deep experience in handling all types of federal tax matters, from routine audits to criminal investigations. We understand the high stakes involved in an ERC audit and will work tirelessly to achieve the best possible outcome for your business.

Case Studies: How We’ve Helped Clients with ERC Audits

To give you a sense of how our ERC audit lawyers can help, here are a few examples of real cases we’ve handled:

Case Study 1: Restaurant Chain Faces ERC Audit

A regional restaurant chain claimed the ERC in 2020 and 2021 based on a significant decline in gross receipts due to government-mandated closures and capacity restrictions. However, the IRS audited their claim and alleged that they had miscalculated their credit amount and failed to maintain proper documentation.Our federal lawyers worked closely with the restaurant’s accounting team to gather and organize the necessary records to support their ERC claim. We also identified several errors in the IRS’s calculations and presented evidence to refute their allegations. Through skilled negotiation, we were able to reach a favorable settlement that reduced the restaurant’s liability by over 50% and avoided any criminal charges.

Case Study 2: Manufacturing Company Accused of Double-Dipping

A mid-sized manufacturing company claimed both the ERC and PPP loans in 2020, but the IRS audited their claim and accused them of double-dipping by using the same wages to calculate both benefits. The company faced significant penalties and potential criminal charges.Our ERC audit lawyers conducted a thorough review of the company’s financial records and identified that they had properly allocated their PPP funds and ERC claims to different wage expenses. We presented this evidence to the IRS and argued that the company had acted in good faith based on the guidance available at the time. Through our advocacy, we were able to resolve the audit with no penalties or criminal charges.

Frequently Asked Questions About ERC Audits

How long does an ERC audit take?

The length of an ERC audit can vary depending on the complexity of your claim and the responsiveness of both parties. In general, you can expect the process to take several months to a year or more.

Can I handle an ERC audit on my own?

While it’s possible to represent yourself in an ERC audit, it’s generally not recommended. The rules surrounding the ERC are complex and the stakes are high, so it’s best to have experienced legal counsel on your side.

How much does it cost to hire ERC audit lawyers?

The cost of hiring ERC audit lawyers will depend on the specifics of your case and the law firm you choose. At Federal Lawyers, we offer flexible fee arrangements and will work with you to find a solution that fits your budget and needs.

What happens if I lose my ERC audit?

If the IRS determines that you claimed the ERC improperly, you may be required to pay back the credit amount plus interest and penalties. In some cases, you could also face criminal charges for tax fraud. However, our federal lawyers will work diligently to minimize your liability and protect your rights throughout the process.

Don’t Face an ERC Audit Alone – Contact Federal Lawyers Today

If your business is facing an ERC audit, don’t wait to seek legal help. The sooner you involve experienced ERC audit lawyers, the better your chances of achieving a favorable outcome. At Federal Lawyers, we’re here to guide you through the process and protect your interests every step of the way. Contact us today for a confidential consultation and let us help you navigate the complex world of federal tax audits with confidence.

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Todd Spodek

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RALPH P. FRANCHO, JR

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JEREMY FEIGENBAUM

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ELIZABETH GARVEY

Associate

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CLAIRE BANKS

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RAJESH BARUA

Of-Counsel

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CHAD LEWIN

Of-Counsel

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