Recently, businesses have become increasingly vulnerable to sophisticated scams and fraudulent activities. One such alarming trend is the rise of Employee Retention Credit (ERC) scam calls, targeting unsuspecting employers seeking financial relief during challenging economic times. These deceptive schemes aim to exploit the confusion surrounding government assistance programs and can result in severe financial losses and damage to a company’s reputation.
In this article, we’ll examine the nature of ERC scam calls and offer guidance on how businesses can protect themselves against these fraudulent practices.
Understanding the Employee Retention Credit
The Employee Retention Credit (ERC) is a legitimate government program introduced to support businesses affected by the COVID-19 pandemic. The ERC provides eligible employers with tax credits for retaining employees during the crisis, compensating them for retaining their workforce despite economic challenges. This program has been instrumental in helping many businesses stay afloat and protect jobs during uncertain times.
The Rise of ERC Scam Calls
As news about the ERC spread, scammers saw an opportunity to exploit the situation for their benefit. These fraudsters use various tactics to deceive business owners into revealing sensitive information or making false payments. Some common strategies employed by ERC scam callers include:
1. Impersonation: Scammers often pose as government officials, tax consultants, or representatives from renowned organizations claiming to provide ERC assistance. They create a sense of urgency to pressure business owners to act quickly without verifying the call’s legitimacy.
2. False Promises: Fraudsters entice businesses with the promise of securing substantial ERC benefits quickly and effortlessly. They may offer guaranteed tax credits or claim to have exclusive access to expedited processing.
3. Phishing: Scam callers may use phishing techniques to obtain sensitive information such as Social Security numbers, Employee Identification Numbers (EIN), and financial data. This data is later exploited for various fraudulent purposes.
4. Upfront Fees: Some scam callers demand upfront payments for their “services,” making it seem like a necessary administrative cost for accessing the ERC. Genuine government programs do not charge any fees for assistance.
Protecting Businesses from ERC Scam Calls
Safeguarding your business from ERC scam calls requires a combination of vigilance and knowledge. Here are some crucial steps to protect your organization:
- Educate Employees: Train your employees to identify common scam call tactics and encourage them to report any suspicious calls to the appropriate authorities within your organization.
- Verify Callers’ Identity: Always verify the identity of anyone claiming to represent a government agency or organization. Legitimate representatives will provide official identification and contact information.
- Never Share Sensitive Information: Remind employees to keep sensitive information private over the phone, especially if unsure about the call’s legitimacy.
- Consult Trusted Professionals: Seek advice from legitimate companies with expertise in helping businesses apply for the ERC, certified tax professionals, or authorized government agencies when applying for the ERC or any other financial assistance program. Be cautious of unsolicited calls offering assistance.
- Report Suspicious Calls: If you receive an ERC scam call, report it to the Federal Trade Commission (FTC) or the Better Business Bureau (BBB) immediately. Reporting such incidents helps prevent others from falling victim to the same scams.
As businesses navigate uncertain economic climates, vigilance against fraudulent practices becomes paramount. The rise of Employee Retention Credit (ERC) scam calls is a concerning development that poses significant threats to unsuspecting employers. By educating themselves and their employees, verifying callers’ identities, and reporting suspicious activities, businesses can safeguard against falling victim to these deceptive schemes.
Bottom Line Concepts Can Help You Claim the ERC
To claim the ERC retroactively for wages paid in 2020 and the first three quarters of 2021, employers must file Form 941-X, Employer’s Quarterly Federal Tax Return. Determining eligibility and the amount of the tax credit your business is due can be complex, and the forms submitted to the IRS must be 100% accurate to receive your credit.
Bottom Line Concepts has helped over 25,000 businesses enroll in the ERC program. Contact us today and schedule a no-cost, no-obligation call to see if you qualify and learn how to claim this valuable credit you may be entitled to.