Employee Retention Tax Credit (ERC)

The Employee Retention Credit (ERC) was a crucial lifeline for businesses throughout the COVID-19 pandemic, but as the IRS clears the backlog and intensifies compliance efforts, understanding the audit landscape is key.

As the IRS shifts focus from processing a surge of ERC claims to scrutinizing potential fraud and inaccuracies, businesses need to be prepared for audits. Current IRS Commissioner Danny Werfel's recent warnings about aggressive marketing and dubious submissions highlight the importance of careful ERC claim handling.

Why ERC Audits Are on the Rise

With the pandemic officially over, the IRS observed a decline in legitimate claims and a surge in questionable submissions influenced by misleading marketing. This shift prompted the IRS to stop accepting new ERC applications in the Fall of 2023. Subsequently, the tax agency enhanced its compliance efforts by doubling down on investigative efforts. IRS officials remain committed to looking into both promoters and businesses filing dubious claims.

ERC Eligibility and Compliance

The ERC, designed to aid businesses during the pandemic, has strict eligibility criteria. Businesses must have faced government-ordered suspensions or significant declines in gross receipts. As ERC audits become more frequent, understanding and adhering to these criteria is vital to avoid penalties.

To combat misleading marketing, the IRS is increasing audit and criminal investigation activities related to the Employee Retention Tax Credit. The goal here is to identify fraud and ensure that businesses claiming the credit meet all qualifications.


At MJ Tax Relief Group, we specialize in ERC matters, offering comprehensive support to businesses facing audits. Our services include:

  • Claim Accuracy Review: Ensuring your ERC claim is accurate and aligns with IRS guidelines.

  • Documentation Assistance: Helping you gather and organize relevant documents to support your legitimate ERC claim, improving the odds that you will be approved without issue.

  • Audit Preparation: Guiding you through the steps to prepare for an ERC audit, minimizing potential risks to your business’s future.

  • Compliance Consulting: Providing ongoing support to ensure your business remains compliant with ERC regulations.

Understanding the potential penalties for inaccurate ERC claims is crucial. Penalties may include a bill for underpayment of taxes, accuracy-related penalties, interest charges, and legal consequences. MJ Tax Relief Group can help businesses navigate these challenges and ensure a favorable outcome.

For expert ERC audit support, reach us at (706) 507-2481 or

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MJ Tax Relief Group

6001 River Road, Suite 315
Columbus, Georgia 31904