Facing an ERC Audit? Don't Panic - We've Got Your Back

Our Proven Approach: Meticulous, Strategic, Relentless

With our deep understanding of tax laws and our proven track record in handling audits, we'll ensure that every i is dotted and every t is crossed. We'll meticulously review your documentation, identify any potential red flags, and craft a rock-solid defense strategy tailored to your unique situation. We're also your negotiators, your voice in the room with the IRS auditors. Our seasoned attorneys know how to communicate effectively, how to address concerns and alleviate doubts, and how to fight for the best possible outcome on your behalf. And when it comes to the courtroom? Well, let's just say we don't back down from a challenge. Our trial lawyers are battle-tested, with a reputation for aggressive advocacy and an unwavering commitment to protecting our clients' interests.

The Spodek Law Group Difference

Now, you might be thinking, "Okay, they sound good, but what sets them apart from every other law firm out there?" Fair question, and we've got the answer.At Spodek Law Group, we don't just treat you like another case file. We take a hands-on, personalized approach, getting to know you and your unique situation inside and out. We hold regular meetings to discuss and strategize your case, ensuring that no stones is left unturned. But it's not just about our process; it's about our people. Our team is comprised of some of the sharpest legal minds in the business, each with a wealth of experience and a track record of success. We're not just lawyers; we're problem-solvers, creative thinkers, and tireless advocates for our clients. And let's not forget about our commitment to communication. We know how stressful and confusing legal matters can be, which is why we make it a point to keep you informed every step of the way. Have a question? Need an update? We're just a phone call or email away, ready to address your concerns and put your mind at ease.

Understanding ERC Audits: What You Need to Know

Before we dive into the nitty-gritty of how we'll handle your audit, let's take a step back and talk about what an ERC audit actually is. An ERC audit is a formal review conducted by the Internal Revenue Service (IRS) to ensure businesses have accurately claimed the ERC. The IRS may select businesses for audit based on various criteria, such as potential discrepancies or higher-risk factors.Several factors may trigger an Employee Retention Credit audit, including:

• Discrepancies in claimed ERC amounts compared to industry averages
• Suspiciously high credit claims that warrant further investigation
• Errors in documentation provided during the ERC claim process

Understanding the audit process is crucial to be adequately prepared. When selected for an ERC audit, businesses should be aware of what to expect during the process. The IRS will initiate the audit by sending a notification letter detailing the issues they plan to examine. Typically, auditors will request various documents, including payroll records, financial statements, tax returns, and Employee Retention Credit calculations. During the audit, businesses will have the opportunity to provide explanations and additional documentation to support their ERC claims. It is essential to remain cooperative and transparent throughout the audit, addressing any queries or concerns raised by the auditors.The audit duration may vary depending on the complexity of the case, but businesses should be prepared for the possibility of a prolonged review process. Once the audit is complete, the IRS will issue a written report with their findings, which could result in either an approval of the ERC claim or a notice of adjustments or penalties.

Preparation is Key: How to Ace Your ERC Audit

To ensure a smooth Employee Retention Credit audit experience, businesses must be proactive in their preparations. Here are some essential steps to take: Maintain Accurate Records Keep detailed records of all ERC-related transactions, including employee information, wages, and qualified expenses. Compliance Check Conduct an internal compliance check to identify any potential issues or errors in your ERC calculations and claims. Seek Professional Guidance Engage a qualified tax professional or ERC specialist (like us!) to review your documentation and calculations for accuracy. Documentation Organization Organize all supporting documents in a systematic manner, making it easier for auditors to review. Employee Eligibility Verification Confirm that your employees meet the eligibility criteria for ERC. Stay Informed Keep up-to-date with Employee Retention Credit guidelines and regulations to ensure compliance with any changes. By implementing these preparatory measures, businesses can significantly reduce the likelihood of facing penalties during an Employee Retention Credit audit.

The Paper Trail: Essential Documents for Your ERC Audit

To streamline the Employee Retention Credit audit process and demonstrate compliance, businesses must gather and maintain a comprehensive set of documents. Some crucial documents to prepare include:

• Payroll Records: Detailed records of wages paid to employees, including relevant tax forms (e.g., Form 941).
• ERC Calculation Records: Documentation supporting the calculation of the Employee Retention Credit claim, including gross receipts, eligible expenses, and qualified wages.
• Financial Statements: Income statements, balance sheets, and cash flow statements.
• Employee Information: Employment records, job descriptions, and evidence of employee eligibility.
• Business Documentation: Articles of incorporation, business licenses, and relevant contracts.
• Government Orders and Shutdown Notices: Documentation of government-mandated shutdowns or significant decline in business operations.
• Supporting Evidence: Any additional documentation that validates ERC eligibility and credit calculations.

By maintaining well-organized records and documents, businesses can present a strong case during an ERC audit, minimizing the likelihood of penalties or adjustments.

ERC Audit Penalties: What's at Stake?

Failure to comply with ERC regulations and reporting requirements can result in severe penalties. The IRS may impose penalties for various reasons, including:

• Negligence: If the IRS determines that your ERC claim was made negligently or without reasonable cause, you could face a penalty of 20% of the underpayment.
• Substantial Understatement: If your ERC claim understates your tax liability by the greater of 10% or $5,000, you could face a penalty of 20% of the underpayment.
• Civil Fraud: In cases of intentional disregard for the rules or fraudulent behavior, the IRS may impose a penalty of 75% of the underpayment.
• Criminal Penalties: In extreme cases, individuals may face criminal charges for willful attempts to evade or defeat tax.

These penalties can quickly add up, making it crucial to have a skilled legal team on your side to protect your interests and minimize any potential financial consequences.

The Role of an ERC Audit Lawyer

An ERC audit lawyer is your ally during this process. They can:

• Review your ERC claim and identify any potential issues
• Help you gather and organize necessary documentation
• Communicate with the IRS on your behalf
• Represent you during the audit
• Negotiate with the IRS if there are any disputes
• Appeal the audit results if necessary

Having a skilled lawyer on your side can not only ease your stress but also increase your chances of a favorable outcome. When it comes to choosing an ERC audit lawyer, you want someone who is:

• Experienced in handling ERC audits
• Knowledgeable about tax law and the ERC
• Responsive and communicative
• Committed to protecting your interests

At Spodek Law Group, we pride ourselves on meeting all these criteria and more. Our team of experienced lawyers is dedicated to helping businesses navigate ERC audits with confidence. We understand that facing an ERC audit can be stressful. That's why we're committed to providing not just legal expertise but also the support and guidance you need during this challenging time. Here's what sets us apart: Personalized Attention We take the time to understand your unique situation and tailor our approach accordingly. Comprehensive Service We handle all aspects of your ERC audit, from preparation to representation. Aggressive Advocacy We assertively protect your interests and work tirelessly to achieve the best possible outcome. Clear Communication We keep you informed at every step and are always available to answer your questions. National Reach With offices in NYC and Los Angeles, we serve clients nationwide.

Don't Face an ERC Audit Alone

At Spodek Law Group, we're here to be your partners, your advocates, and your guides through this process.We understand that every client's situation is unique, which is why we take a personalized approach to every case. We'll work closely with you to understand the intricacies of your business, your ERC claim, and any potential challenges you may face. And when it comes to the audit itself? Well, that's where our expertise really shines. We'll be with you every step of the way, from gathering and organizing documentation to representing you in front of the IRS auditors. But it's not just about our legal prowess; it's about our commitment to you as a client. We know how stressful and overwhelming legal matters can be, which is why we make it a point to keep you informed and involved throughout the process. Have a question? Need an update? We're just a phone call or email away, ready to address your concerns and put your mind at ease. Call us today at 212-210-1851 or schedule a free consultation online.