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Miami, FL
Employee Retention Credit (ERC)
The Employee Retention Credit created significant opportunities for businesses during the pandemic period, and significant IRS scrutiny in the years that followed. KVasquez Law advises businesses in Miami on ERC eligibility, documentation, amended returns, IRS audits, and repayment matters with direct, legally informed counsel.
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Coral Gables, FL"Finally, a tax attorney who speaks plain English and Spanish. She explained everything without the legal jargon."
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Doral, FL"KVasquez Law helped me get my estate plan in order after years of putting it off. Clear process, no pressure, and everything was explained in plain language."
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Miami Lakes, FL
Legal Guidance for Employee Retention Credit Matters
The ERC is a refundable payroll tax credit that was made available to eligible employers who retained employees during the COVID-19 pandemic. While the credit itself was legitimate and beneficial for many businesses, the ERC program also attracted a significant volume of improper claims, many of them filed by third-party promoters who overstated eligibility or misrepresented the requirements.
The IRS has since launched extensive enforcement activity targeting ERC claims it considers questionable. Businesses that claimed the credit now face a range of possible outcomes including audit, repayment demands, penalties, and in serious cases, referral for criminal investigation of the promoters involved.
Whether you claimed the ERC and are now facing IRS scrutiny, want to verify that your claim was properly supported, or are considering withdrawing or amending a prior filing, KVasquez Law provides direct legal counsel focused on protecting your interests and resolving your ERC matter with the IRS.
ERC Filings, Amendments, and IRS Disputes
ERC Eligibility and Documentation
A valid ERC claim requires meeting specific eligibility criteria and maintaining documentation that supports the claim. The IRS looks at:
- Whether the business experienced a full or partial suspension of operations due to a government order limiting commerce, travel, or group meetings
- Whether the business experienced a significant decline in gross receipts during the applicable quarters
- The number of full-time employees and how that affects the calculation of qualified wages
- Payroll records, government orders, financial records, and contemporaneous documentation supporting the eligibility basis
Many businesses that claimed the ERC did so based on advice from third-party promoters who applied aggressive or incorrect eligibility interpretations. KVasquez Law reviews the underlying documentation and eligibility basis for your claim to assess how it would hold up under IRS examination.
IRS ERC Audits and Examinations
The IRS has dedicated significant enforcement resources to ERC compliance and is actively examining claims across a range of industries and claim sizes. If your business receives an IRS notice related to your ERC claim, prompt legal response is essential. KVasquez Law:
- Reviews the IRS notice and the specific issues being raised
- Assesses the strength of your eligibility position and documentation
- Manages all communication with the IRS on your behalf
- Prepares the legal and factual response to the examination
- Advises on resolution options if the IRS proposes to disallow or reduce your claim
ERC Withdrawal and Amended Returns
The IRS has offered programs allowing businesses to withdraw pending ERC claims or amend prior returns to reduce or eliminate improper claims with reduced penalty exposure. KVasquez Law advises on:
- Whether withdrawal or amendment is the right course of action based on your specific eligibility position
- Managing the withdrawal or amendment process to achieve the most favorable outcome
- Advising on the tax consequences of repaying a credit that was already received and used
ERC Repayment and Penalty Exposure
If the IRS determines that an ERC claim was improper in full or in part, the business may be required to repay the credit with interest and potentially face accuracy-related or civil fraud penalties. KVasquez Law advises on:
- Negotiating the scope of repayment where the IRS position is contested
- Penalty abatement options where the circumstances support a reduction
- Installment agreements or other resolution structures if the repayment amount is significant
- Protecting business owners and responsible individuals from personal liability exposure where applicable
How a Tax Attorney Can Help With ERC Issues
ERC matters sit at the intersection of tax law, payroll compliance, and IRS enforcement in a way that requires legal counsel rather than simply accounting support. The stakes are high and the IRS is actively pursuing cases.
Independent Review of Your Claim
Many businesses that claimed the ERC relied entirely on the advice of the promoter or preparer who filed the claim. KVasquez Law provides an independent legal review of your eligibility basis and documentation so you understand where you stand before the IRS raises the issue.
Attorney-Client Privilege
Discussions with KVasquez Law about your ERC position are protected by attorney-client privilege. This is particularly important in ERC matters where the IRS is examining the conduct of promoters and the businesses that worked with them. Privileged communications cannot be compelled by the IRS in the way that communications with an accountant or preparer can.
Representation Through the Full Process
Whether your matter involves a document request, an audit, a proposed disallowance, or a repayment demand, KVasquez Law represents your business directly with the IRS at every stage. You are not navigating the enforcement process without experienced legal counsel in place.
Realistic Assessment of Your Position
Not every ERC claim under scrutiny is invalid. Some businesses have strong eligibility documentation and a well-supported claim. Others have exposure that needs to be addressed proactively. KVasquez Law gives you an honest assessment of where your claim stands before advising on next steps.
FAQ
Frequently Asked Questions About the Employee Retention Credit
Question 1
Is my business at risk if a promoter filed my ERC claim?
Potentially yes. The IRS has made clear that the business, not the promoter, is responsible for the accuracy of its tax filings. If a promoter filed an aggressive or improper ERC claim on your behalf, your business may face repayment demands, penalties, and interest even if you were not aware the claim was improper. KVasquez Law advises on how to assess your exposure and what steps to take to protect your business.
Question 2
What should I do if I receive an IRS notice about my ERC claim?
Contact a tax attorney before responding. The IRS notice will identify what is being examined and any deadlines for response. How you respond and what documentation you provide shapes the direction of the examination. KVasquez Law reviews the notice, assesses your eligibility position, and manages the response on your behalf.
Question 3
Can I still withdraw my ERC claim if I think it was improper?
Depending on the status of your claim, withdrawal may still be an option. The IRS has offered withdrawal programs for businesses with pending claims that have not yet been paid. For claims that have already been paid, an amended return may be the appropriate path. KVasquez Law advises on which option applies to your situation and manages the process to minimize penalty exposure.
Question 4
What penalties can apply to an improper ERC claim?
Penalties for improper ERC claims can include accuracy-related penalties of twenty percent of the underpayment, civil fraud penalties of seventy-five percent in cases of fraudulent claims, and interest on the amount owed from the original due date of the return. In cases involving promoter fraud, criminal referrals are possible for the promoters involved. KVasquez Law advises on penalty abatement options where the circumstances support a reduction.
Question 5
What documentation should I have to support my ERC claim?
Supporting documentation typically includes payroll records for the relevant quarters, financial statements showing gross receipts, copies of applicable government orders if your eligibility is based on a suspension of operations, and any analysis or work product prepared by the promoter or preparer at the time of filing. KVasquez Law reviews your documentation and advises on any gaps that could create exposure under examination.
Contact us
Get Answers About Your ERC Position
Whether you are facing IRS scrutiny, want to review the accuracy of a prior claim, or need to understand your options before the IRS acts, KVasquez Law provides direct legal counsel on ERC matters with attorney-client privilege protections.
Get in Touch Directly
Phone
(305) 359-7522
legal@kvasquezlaw.com
Office Address
1200 Brickell Avenue, Suite 1950, Miami, FL 33131
