Facing an ERC Audit in Chicago? Here's What You Need to Know

Getting audited is never fun, but an Employee Retention Credit (ERC) audit can be particularly stressful1. The ERC program provided much-needed financial relief during the pandemic, but it also opened the door for abuse and errors2. So, if you're facing an ERC audit in Chicago, don't panic - we've got your back. First things first, what exactly is an ERC audit? It's an examination by the IRS to verify if your business qualified for the ERC and that you calculated the credit correctly3. They'll be looking at things like:

• Your payroll records
• Documentation of suspended operations or declined gross receipts
• Employee retention and compensation details

Why You Might Be Facing an ERC Audit

There are a few common reasons why the IRS might decide to audit your ERC claim4:

1. Math Errors: Even a small calculation mistake can raise red flags and lead to an audit.
2. Lack of Documentation: The IRS requires extensive documentation to support your ERC claim - if you're missing key records, they'll want to take a closer look.
3. Suspicious Activity: If your claim seems unusually large or doesn't align with industry norms, the IRS may investigate further.
4. Random Selection: In some cases, audits are simply random - a way for the IRS to ensure compliance across the board.

Regardless of the reason, being prepared is crucial. That's where having an experienced Chicago ERC audit lawyer comes in handy.

The Role of a Chicago ERC Audit Lawyer

Facing an IRS audit alone is risky - one misstep could lead to hefty penalties or even criminal charges5. A skilled Chicago ERC audit lawyer can:

• Ensure you understand your rights and obligations
• Gather and organize all necessary documentation
• Communicate with the IRS on your behalf
• Negotiate favorable resolutions if issues arise
• Represent you in court if needed

At Spodek Law Group, our team has extensive experience handling complex tax matters and IRS audits6. We know the ins and outs of the ERC program, so you can rest assured your case is in capable hands.

Preparing for Your Chicago ERC Audit

If you've been notified of an upcoming ERC audit, time is of the essence. Here are some key steps to take:

1. Gather Documentation: Collect all relevant payroll records, financial statements, tax returns, and any other documentation that supports your ERC claim.
2. Review Your Claim: Carefully review your original ERC calculations and supporting documents to identify any potential errors or missing information.
3. Consult a Lawyer: Don't go it alone - schedule a consultation with an experienced Chicago ERC audit lawyer to discuss your case and develop a strategy.
4. Respond Promptly: The IRS will provide deadlines for submitting requested information - make sure to respond promptly to avoid penalties.
5. Stay Organized: Keep all audit-related documents and communications organized and easily accessible.

Remember, the IRS auditors are not your enemies - they're simply doing their job to ensure compliance7. Remaining cooperative and transparent throughout the process can go a long way.

Common ERC Audit Issues and How to Address Them

Even if you followed the rules to a tee, audits can still uncover issues that need to be addressed. Here are some common problems that may arise during a Chicago ERC audit:

1. Eligibility Concerns

The IRS may question whether your business truly qualified for the ERC based on the eligibility criteria. To address this, you'll need to provide clear documentation demonstrating:

• Suspended operations due to government orders
• Significant decline in gross receipts compared to previous years
• Retention of employees during the eligible period

Your lawyer can help ensure you have the necessary evidence and present it in the most compelling way possible.

2. Calculation Errors

Even a small mistake in calculating your ERC amount can lead to big problems9. Common errors include:

• Miscalculating qualified wages
• Incorrectly applying eligibility rules for affiliated groups
• Failing to account for other COVID-19 relief programs

Having an experienced tax professional review your calculations can help identify and correct any errors before the audit.

3. Lack of Documentation

The IRS requires extensive documentation to support your ERC claim, including10:

• Payroll records
• Financial statements
• Tax returns
• Government orders impacting your business
• Employee retention and compensation details

If you're missing key documents, your lawyer can advise you on how to reconstruct records or provide alternative evidence.

4. Employee Classification Issues

Determining which employees qualify for the ERC can be tricky, especially for businesses with a mix of full-time, part-time, and contracted workers11. Your lawyer can help ensure you've properly classified employees and calculated qualified wages accordingly. No matter what issues arise during your Chicago ERC audit, having a knowledgeable legal team on your side can make all the difference.

Potential Outcomes and Next Steps

Depending on the findings of the audit, there are a few potential outcomes:

1. No Change: If the IRS determines your ERC claim was accurate and properly supported, no further action is required.
2. Agreed Adjustment: If minor issues are identified, you may agree to make adjustments to your claim and potentially pay additional taxes or penalties.
3. Disagreed Case: In cases of significant disagreement, the IRS may issue a Notice of Deficiency, which you can then appeal or take to court.

Regardless of the outcome, it's crucial to understand your options and rights. Your Chicago ERC audit lawyer can advise you on the best course of action and represent you throughout any appeals or legal proceedings.

Why Choose Spodek Law Group for Your Chicago ERC Audit?

At Spodek Law Group, we understand the stress and complexity of facing an IRS audit. That's why we're committed to providing top-notch legal representation and personalized service to every client13. Our team of experienced tax attorneys and legal professionals have successfully navigated countless audits and tax disputes. We'll work tirelessly to protect your rights and interests, whether that means negotiating a favorable resolution or taking your case to court. But what truly sets us apart is our dedication to client service. We treat every client like family, offering:

• 24/7 availability and responsiveness
• Clear communication and transparency throughout the process
• A commitment to understanding your unique situation and goals
• Unwavering advocacy and a willingness to fight for the best possible outcome

When you choose Spodek Law Group, you're not just hiring a law firm - you're gaining a trusted partner committed to your success.

Taking the Next Step

Facing an ERC audit can be daunting, but you don't have to go it alone. Schedule a risk-free consultation with our Chicago ERC audit lawyers today. We'll review your case, answer your questions, and develop a tailored strategy to protect your interests.Don't let an IRS audit derail your business - take control of the situation and let Spodek Law Group be your guide. With our expertise and unwavering commitment, you can face this challenge with confidence and peace of mind. The road ahead may be challenging, but with the right legal team by your side, a successful outcome is well within reach. Contact us today and let's get started on securing the best possible resolution for your Chicago ERC audit.1 2 3 4 5 6 7 9 10 11 13