Businesses that wrongly claimed ERC might face an IRS penalty.

Given the unexpected flood of applications and amendments received by the IRS to claim the Employee Retention Credit, the government agency mentions the possibility of imposing a penalty on those businesses that wrongly claimed this benefit. The outbreak of fraudulent “specialists” that wrongfully promoted the ERC, has led to many small businesses being tricked into claiming a benefit they were not entitled to. The issue got serious enough to be included in the Dirty Dozen tax scams for 2023 list. Now, the IRS is facing the need to weigh the real guidance behind those businesses that were duped into this new scam scheme.

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