IRS offers new process for reporting ERC mills

October 31, 2022

The IRS announced a new way for CPAs and other tax professionals to make anonymous reports about third-party vendors who promote improper claims for the employee retention credit (ERC).

These third-party “ERC mills” often charge large upfront fees or a fee contingent on the amount of the ERC refund and may not inform the taxpayer that wage deductions claimed on the business’ federal income tax return must account for the credit amount.

The IRS’ Form 3949-A, Information Referral, now allows CPAs, firms and other professionals to anonymously report fraud with questionable ERC mills. The AICPA recently applauded the service's announcement.

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