IRS Offers New Process for Anonymous Reporting of Employee Retention Credit Mills
The IRS recently revealed it is offering a new way to submit anonymous reports regarding third-party vendors promoting improper claims for the employee retention credit (ERC) that was implemented in response to the COVID-19 pandemic.
Form 3949-A, Information Referral, now allows CPAs, firms and individuals to anonymously report concerning ERC vendors to the IRS. The form was previously used to report fraud anonymously.
Created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, the ERC is a refundable tax credit intended for businesses that paid employees while they were shut down due to the pandemic or that saw major declines in gross receipts. The ERC ended on Sept. 30, 2021, for most employers, and eligible taxpayers can claim the credit on an original or amended employment tax return for a period between March 13, 2020, and Sept. 30, 2021.
The new anonymous reporting process was put in place in response to concerns from CPAs about an increase in the number of ERC vendors who are promoting improper claims of the credit. The vendors, who are not CPAs, promise tax savings that go beyond what the business can claim or tax savings to businesses that do not qualify for the ERC at all.