Lack of Experience
An experienced ERC provider should be familiar with all aspects of ERC processing. They should know the requirements and guidelines to qualify for the credit, the application process, the documentation required, and how to file for it. If a provider has little or no experience or cannot provide clear guidance for the process, you’ll want to steer clear. These are clear signs that the provider set up shop during the pandemic. These fly-by-night-providers promote aggressively “easy,” “risk-free,” and “instant” ERC qualification to unsuspecting businesses. In fact, many such enterprises only offer ERC and have no experience with other credits and incentives, potentially indicating that they’re promoters looking to make a quick buck off of unsuspecting businesses.
Unrealistic Offers
Be wary of calls, emails, or advertisements from providers promising an “easy application process” for the ERC. ERC evaluation takes strict scrutiny and adherence to IRS standards. Legitimate providers should not be aggressively marketing their services to unsuspecting businesses. Frequent unrealistic emails or calls from an ERC provider, showing excessive excitement, offering an unbelievable promise, or cross-selling – are red flags. No authentic tax consultant engages in aggressive solicitation as the demand for their services is naturally high.
Upfront Fees
When it comes to claiming ERC, providers should never charge upfront fees. This practice is not only unethical but also illegal. ERC scams are rampant, and many have fallen prey to these fraudulent activities. Scammers often ask for an upfront fee to help claim the ERC, only to disappear once the payment has been made. It is important to note that ERC providers are not allowed to charge fees until after the ERC has been successfully claimed. This regulation is put in place to protect individuals from fraudulent activities. Therefore, it is always advisable to be cautious and do thorough research when choosing a provider to claim your ERC. Remember, if a provider asks for upfront fees, it may be a red flag, and you should always exercise caution before proceeding with such providers.
Quick Eligibility Determination
Beware of providers who promise instant determination of your ERC eligibility without considering your tax situation. The ERC involves complex calculations and a thorough review before applying. If a provider claims they can determine your eligibility within minutes or without a detailed discussion about your business’s taxes, it’s probably a scam. Take the time to carefully assess the complexities of the ERC before making any decisions.
Lack of Transparency
A legitimate ERC service provider operates transparently, informing potential clients of how the process works and providing clear information about fees associated with their services. Consider it a red flag if a provider avoids answering your questions or the response is unclear. Some ERC scams are designed to deceive business owners by omitting or hiding information prospects should know about the audit or investigation process.
If a promoter advises you to ignore the advice of your trusted tax professional, it’s a red flag. Always consult with an experienced tax professional before making any decisions. Consider it a red flag if a provider avoids answering your questions or the response is unclear. Some ERC scams are designed to deceive business owners by omitting or hiding information clients should know about the audit or investigation process.
