Employee Retention Tax Credit
Overview
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, provides eligible employers with an Employee Retention Tax Credit (ERC) that is allowed to offset certain employment taxes, such as the employer payroll tax.
Enacted alongside the Paycheck Protection Program, the ERC tax credit was initially overlooked by many. As widespread discussion of the ERC began, several misconceptions about the ERC popped up. This false information led many to believe that their business does not qualify, even though it might.
Services Provided
ERC Qualification Review with Credit Calculation and Filing For ERC
Dickinson Bradshaw's tax team reviews information from our client, then applies our research on the ERC and the relevant governmental order to determine whether the employer legally qualifies for the ERC. If our client qualifies, then our team calculates the credit and files the appropriate return to claim the ERC credit.
Unlike many other ERC service providers, our team consists of attorneys and/or attorney-CPAs to research the applicable laws and complete the tax returns. Because we act in the best interest of our clients, our team of tax professionals has no issue telling a client they are ineligible for an ERC tax credit.
ERC Qualification Guidance
Due to the ambiguity surrounding many portions of this tax law, clients have sought, and we have provided, research and guidance regarding qualification for the ERC. Again, our team has no qualms with telling clients they do NOT qualify for the ERC.
Secondary ERC Review
Due to the IRS’s repeated warning that “promoters continue pushing ineligible people to file” for the ERC and that there are “third parties aggressively promoting these ERC schemes,” clients have asked our team to review a third-party advisor’s initial ERC filings and workpapers, if any, and to correct any errors and provide legal advice on whether the employer qualifies under the law.
Disputes with Promoters and Third Parties
Through providing secondary reviews of third-parties’ ERC filings, it has become clear that many of these third-party companies which solicit and prepare ERC returns may be unqualified to advise on the legal parameters of the ERC and/or are not working in the best interests of the employer.
Due to the terms of the contract the third parties require the employer to sign, and the nature of the fee charged, there are often disputes with the third party. As a full-service law firm, our litigation attorneys have utilized the legal process to handle legal disputes with third-party ERC companies.
Defense of IRS Audits of ERC Claims
While we have not yet handled an IRS audit of an employer’s ERC claim, our team has the expertise to do so.
Our ERC Team
Unlike many third parties advertising ERC services, the ERC team at our Des Moines law firm is made up of attorneys and/or attorney-CPAs who are subject to ethical rules that require us to put our client’s interest first.
Attorney Cody Edwards previously served as legal counsel at the Iowa Department of Revenue, and Attorney Charles Telk is also a licensed CPA with over 10 years of public accounting experience.
Attorneys Will Reasoner and Lars Hulsebus are experienced litigators who have successfully guided clients through many kinds of complex legal complaints and civil suits.
To explore if your organization qualifies for the ERC or if you would like to discuss the validity of a third-party’s work on your return, please contact us to set up a consultation.
Additional Resources
For the latest information on the ERC, visit our ERC blog.
