Because the ERC is such a substantial tax credit, and because it is complicated for many business owners to understand, it has unfortunately attracted many scammers. 

The number of ERC scams has caught the attention of the government. For example, during a Congressional ERC oversight sub-hearing this comment was made by Congressman Schweikhart of Arizona’s First District:

“ERTC scams and fraud have been increasing, so much so that the IRS has been warning about these schemes since the fall of 2020, encouraging businesses to be wary of aggressive ERTC marketing. The IRS noted various warning signs for consulting firms that may be bad actors. Unsolicited ads, calls, emails, texts from unknown persons, and statements suggesting that the consultant can determine ERTC eligibility and tax refund estimates within minutes.

In March 2023, the IRS added widely circulated promoter claims involving ERTC to the newly introduced annual ‘Dirty Dozen’ tax scam list.”  

Red Flags That Can Indicate ERC Scams

• Promises to provide you with tax refund estimates within minutes.  
• Charging extremely large upfront fees.  
• Tax preparers refusing to sign the ERC return that is filed by the business so that just the taxpayer claiming the credit is exposed to risk.  
• Claims from the company that you qualify for the ERC before the company looks at your situation.  
• Claims from the company that you should submit the claim because there is nothing to lose – In reality, there can be substantial penalties for improperly trying to claim the ERC.
  
  

How to Avoid ERC Scams

1. Be aware that if you did not own a business during 2020 or 2021, there is no possibility that you qualify for the ERC. If someone tells you otherwise, they are almost certainly a scammer. 
2. Only work with tax professionals who are trustworthy according to these IRS guidelines.  
3. Request a detailed worksheet that explains ERC eligibility and the calculations that the company made to determine your ERC amount. 
4. Ask for a copy of the government shutdown order that the company claims makes you eligible for the ERC. 
5. Read the IRS news release on avoiding ERC scams. 
   
   

We’re the Good Guys! 

Here at Ameriwest USA, we are happy to provide you with any documentation or other information you might need to feel comfortable moving forward with us as your ERC preparer. 

We can also answer any other questions that you might have.