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Employee Retention Credit

Cherry Bekaert has an experienced and knowledgeable team that can help your business claim the Employee Retention Credit (ERC).

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Retaining Employees During the Pandemic

What Is the Employee Retention Credit?

The Employee Retention Credit (ERC) was introduced as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act in 2020 to incentivize employers to retain employees during the pandemic by offering a refundable tax credit against employment taxes. It was later expanded into four separate ERCs for the following periods:

  • March 13, 2020 – December 31, 2020
  • January 1, 2021 – March 31, 2021
  • April 1, 2021 – June 30, 2021
  • July 1, 2021 – September 30, 2021

Who Is Eligible for the Employee Retention Credit?

As of April 15, 2024, employers eligible to claim the ERC may no longer claim the 2020 ERC.  Eligible Employers may still claim the ERC for any of the first three quarters of 2021 until April 15, 2025 (to the extent they qualify as an Eligible Employer).

How Can We Help?

Cherry Bekaert has a dedicated ERC team that can help guide your business in the application and claiming process for claiming and defending audits around the ERC.

Now through 2025, Cherry Bekaert is assisting with the following:

  • Identifying and filing new 2021 claims.
  • Assisting taxpayers who worked with other consultancies to develop documentation to answer IRS inquiries.
  • Assisting professional employer organizations (PEOs) verify that their clients are Eligible Employers for purposes of the ERC.
  • Helping taxpayers who worked with other consultancies to withdraw inappropriate claims or return funds that they should not have received through the Voluntary Disclosure Program for 2021 ERC claims which is open until November 22, 2024, and allows for withdrawal of claims that have been received at a 15% discount.
Article

How to Prepare for ERC Audits: A Strategic Preparation Guide

Our team has assisted 1,200+ employers in exploring ERC eligibility, identifying $650 million in ERC with IRS inquiries. Businesses claiming ERC should be ready for potential audits, so understanding the audit process and strategies for readiness is essential.

Read More

Are You Eligible for the ERC?

For more information on eligibility requirements for the Employee Retention Credit, please reach out to your local Cherry Bekaert professional today.

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Understanding ERC Audits

IRS ERC Audits

An IRS ERC Audit is a formal review, by the IRS, which ensures that businesses have accurately asserted their ERC claims. The selection for an audit hinges on diverse criteria, encompassing potential disparities or heightened risk factors. A comprehensive understanding of the audit process is indispensable for businesses to ready themselves adequately.

For swift resolution in an IRS ERC audit, leverage Cherry Bekaert as professional representation. Our team is familiar with ERC and IRS audits and can efficiently address IRS requirements, ensuring a prompt and comprehensive response especially when eligibility and calculations are pre-documented.

What Sparks an ERC Audit?

Several factors may set in motion an ERC audit, including:

  • Discrepancies observed in claimed ERC amounts when compared to data IRS has available from prior IRS filings made by the employer and public data.
  • Obvious errors in the filing, including no tax preparer signature on the filing, indicating that the claim may be fraudulent.
  • Inability for the IRS to determine that the employer’s income tax properly reflects the claiming of the credit.
  • High credit claims support the administration’s initiative of focusing on high-income taxpayers.

What Does the IRS Do During an ERC Audit?

  • Start with an interview about the business and how eligibility for and calculation of the ERC was performed.
  • An Information Document Request (IDR) will then be issued to request support for the determination of eligibility and the calculation.
  • At the conclusion of the audit, the IRS will issue a report authorizing the payment of the credit or disallowance of some or all the credit.
  • If some or all the credit is disallowed, the taxpayer can appeal the decision of the IRS.

What Can Cherry Bekaert Do for You?

  • Before an IRS examination begins:
    • Review the documentation and calculations that you have so that you are confident that you are entitled to the credit claimed.
  • Provide additional documentation so that you have what is needed if the IRS examines your claims.
  • After the IRS initiates an examination:
    • Represent you before the IRS, helping with the agent interview and responding to the IDR on your behalf.
    • Efficiently converse with the IRS regarding the agent’s concerns and satisfy the concerns based on the IRS’s authority.

IRS ERC Audits

An IRS ERC Audit is a formal review, by the IRS, which ensures that businesses have accurately asserted their ERC claims. The selection for an audit hinges on diverse criteria, encompassing potential disparities or heightened risk factors. A comprehensive understanding of the audit process is indispensable for businesses to ready themselves adequately.

For swift resolution in an IRS ERC audit, leverage Cherry Bekaert as professional representation. Our team is familiar with ERC and IRS audits and can efficiently address IRS requirements, ensuring a prompt and comprehensive response especially when eligibility and calculations are pre-documented.

What Sparks an ERC Audit?

Several factors may set in motion an ERC audit, including:

  • Discrepancies observed in claimed ERC amounts when compared to data IRS has available from prior IRS filings made by the employer and public data.
  • Obvious errors in the filing, including no tax preparer signature on the filing, indicating that the claim may be fraudulent.
  • Inability for the IRS to determine that the employer’s income tax properly reflects the claiming of the credit.
  • High credit claims support the administration’s initiative of focusing on high-income taxpayers.

What Does the IRS Do During an ERC Audit?

  • Start with an interview about the business and how eligibility for and calculation of the ERC was performed.
  • An Information Document Request (IDR) will then be issued to request support for the determination of eligibility and the calculation.
  • At the conclusion of the audit, the IRS will issue a report authorizing the payment of the credit or disallowance of some or all the credit.
  • If some or all the credit is disallowed, the taxpayer can appeal the decision of the IRS.

What Can Cherry Bekaert Do for You?

  • Before an IRS examination begins:
    • Review the documentation and calculations that you have so that you are confident that you are entitled to the credit claimed.
  • Provide additional documentation so that you have what is needed if the IRS examines your claims.
  • After the IRS initiates an examination:
    • Represent you before the IRS, helping with the agent interview and responding to the IDR on your behalf.
    • Efficiently converse with the IRS regarding the agent’s concerns and satisfy the concerns based on the IRS’s authority.
Case Study

Auto Dealerships Save Millions with Employee Retention Credit

Read the success stories of two auto dealerships that turned to the ERC for financial relief during pandemic challenges. Find out how they saved millions.

Read Story

Our Professionals

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Martin Karamon

Tax Credits & Incentives Advisory Leader

Partner, Cherry Bekaert Advisory LLC

Carolyn Smith Driscoll

Tax Credits & Incentives Advisory

Director, Cherry Bekaert Advisory LLC

Deborah Walker

Compensation & Benefits Leader

Director, Cherry Bekaert Advisory LLC

Contact Our ERC Professionals