While Innovation Refunds and other turnkey tax solution providers have been helping thousands of businesses secure life-changing ERCs (Employee Retention Credits) over the past two years, other players within the space have emerged with less than honorable intentions. According to Innovation Refunds CEO Howard Makler, several ERC mills have been taking advantage of small, vulnerable companies by charging exorbitant fees for ERC verifications and by taking huge percentages of the credit funding upon its approval and issuing.
Congress launched the Employee Retention Credit (ERC) program under the CARES Act in 2020 in response to the COVID-19 outbreak in the United States. The program encourages businesses to keep employees on their payroll by providing refundable tax credits that cover 50% of wages paid by an eligible employer, up to $10,000. Certain companies have qualified for payroll tax refunds of up to $26,000 per employee, even if they have received Paycheck Protection Program (PPP) funds.
The rules and regulations tied to ERC tax credits have been revised multiple times under the CARES Act. This has led to constant confusion among business owners regarding the program's eligibility requirements. As a result, a litany of ERC companies have surfaced to meet the demand for specialized assistance with the verification and application processes. Often, these firms only manage ERC tax refunds and are always up to date with the latest regulations.
However, per Makler, there are a few key indicators that business owners can use to differentiate real ERC companies from the bad players. By arming themselves with this knowledge, business owners and executives can avoid engaging with corrupt organizations altogether.
Makler noted how the first red flag small businesses should be wary of is any mention of an ERC verification or qualification fee. The verification process itself should have no associated costs whatsoever.
"The Innovation Refunds team has conducted hundreds of verification checks since the launch of the ERC program, never once having charged a small business for said service. Innovation Refunds and other legitimate ERC companies only request payment from small businesses after they have received their tax credit returns," said Makler.
Makler went on to advise small businesses to do their research when it comes to evaluating ERC-focused firms. Evaluating whether an ERC business has any partnerships in place is critical to determining its level of credibility.
"Testimonials and a proven track record are essential," said Makler." "We have helped over 60 community banks educate their clients on ERC, most of which could speak to the value we have brought them through our services and support."
Ultimately, Makler and the Innovation Refunds team want small businesses to acknowledge the existence of the malicious actors within the space while still making the effort to seek the tax return credits they need and deserve.
"Navigating the ever-changing and confusing world of ERC can be challenging, but conducting quality research into the firms that are supposed to be helping you secure your tax return credit can be the difference between receiving critical support from the government and losing out big time," said Makler.
As quarterly rollbacks begin to limit ERC claims in the coming months, the Innovation Refunds team aims to serve as a voice of education. Please visit https://www.innovationrefunds.com/ for more information.
About Innovation Refunds
Our mission is to assist small and medium-sized businesses to attain cash incentives from federal and state governments.
Innovation Refunds began providing its services in 2020. Since then, it has been able to provide financial solutions to thousands of companies, with billions in cash refunds available for small and medium-sized businesses.
To learn more, visit www.innovationrefunds.com.
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