Prose by Tax Pros

Congress introduced the employee retention credit (“ERC”) back in March 2020, some taxpayers are still making ERC claims today, and others have the ability to do so until April 2025. These protracted solicitations have triggered questions about the validity of recent ones. Some ask, for example, why taxpayers with legitimate ERC claims did not file them right away, on their original employment tax returns. One reason is that the IRS did not issue certain guidance until months after Congress enacted the relevant laws. Another is that some of that guidance had retroactive effect. This meant that taxpayers had to file amended employment tax returns, sometimes months or years after the fact, in order to take advantage of favorable modifications to the ERC rules. This article, the latest in a multi-part series, analyzes changes over time that have led to the continuation of ERC claims. Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T...

There are thousands of blogs, articles, comments, advertisements, infomercials and more about the Employee Retention Credit (“ERC”). Regardless of their slant, all these items generally have one thing in common: a disturbing lack of substance. Everything in the ERC realm seems to have devolved into sound bites based on partial information, which is not helpful for taxpayers and advisors who are looking to truly understand the situation and make informed decisions. This article, which is the second in a multi-part series, tries to reverse this trend. It explains the reasons why Congress introduced the ERC, four laws and IRS guidance, periods during which taxpayers can still claim ERCs, initial problems detected by watchdogs, series of IRS warnings, training materials for audit personnel, consequences for taxpayers filing excessive claims, and extended assessments periods. In short, the goal of this article is to supply substance for taxpayers and advisors as the IRS implements enforceme...

  The U.S. economy is humming along, a major disruption occurs, Congress introduces tax incentives to stabilize matters, the IRS provides guidance to implement them, some taxpayers exploit voids and ambiguities, and the IRS takes actions to halt perceived abuses. This is a timeless tale that has recently centered on the Employee Retention Credit (“ERC”). To understand the inevitable clashes, one must first appreciate the applicable rules. These are complicated, of course, deriving from several laws passed in rapid succession and administrative guidance issued on their heels. This article, the first in a multi-part series, explores the ERC rules from start to finish. Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.) is a Shareholder in the Tax Controversy Section of Chamberlain Hrdlicka and Chair of the International Tax Group.

Many taxpayers desperately needed an economic injection from the government to survive massive problems caused by COVID. Needing financial benefits is one thing, but qualifying for them is another. When it came to eligibility for employee retention credits (“ERCs”), employers had to demonstrate several things, including that their total revenue dropped by a certain percentage or that a governmental mandate triggered a partial or full suspension of their business operations. The IRS is convinced that some employers are abusing the rules, relying on suspensions that did not reach the relevant thresholds. The article addresses this important issue, focusing on the impact of supply chain problems. Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.) is a Shareholder in the Tax Controversy Section of Chamberlain Hrdlicka and Chair of the International Tax Group.