Will this trigger an audit?
Now that we have covered the primary qualifiers for the employee retention tax credit, I want to start diving into some of the most commonly asked questions I get.
The burning question
One question that has come up several times revolves around the likelihood of getting audited if you take advantage of the employee retention tax credit. While any additional tax credits would be welcomed by most business owners, the thought of all of the additional scrutiny that comes from an audit can give them pause. Even if you are doing everything right, audits are stressful and can take up a lot of time.
The short answer: NO!
The longer answer is that as long as you make sure you meet all qualifying standards and document everything you really have nothing to fear. Congress put forth these aid packages to help business owners, and in return help the economy. The goal was to bring people back to work, not to create a tax-trap to create more work for them.
In the end, the goal was to get subsidies to businesses. As long as you are dotting your i’s and crossing your t’s you shouldn’t be worried about anything! Even if an audit were to occur, it should be annoying but not in any way scary.
Income tax vs. payroll tax
An issue we often run into is that many income tax specialists are very familiar with their side of the aisle but not as familiar with payroll taxes. As this tax credit is focused on employee retention and keeping people employed, that knowledge is absolutely vital when applying for it. From application through documentation, if you don’t have all of the knowledge necessary you may be setting yourself up for issues. If you know what you’re doing, or hire somebody like Mewes CFO’s, you have absolutely nothing to worry about!
Don’t skip steps!
While the main message here is that you shouldn’t be worried about triggering an audit, it is worth discussing the possibility.
This is the IRS we are talking about and there are a lot of rules and regulations to make sure you are operating within. While there are many opportunities to take advantage of the employee retention tax credit, if you don’t make sure everything is documented you could be in trouble should an audit arise.
The IRS has 4 years to review each submission and initiate an audit or investigation. Rather than worry about this for 4 years, you can just put in the work to make sure everything is right from the beginning.
- Verify all qualifications are met
- Substantiate those claims with necessary data
- Document how that data, or government shutdowns/mandates, directly affected your business
- Include all documentation and related mandates/shutdowns upon submission
Peace of mind
Still sound overwhelming? If you choose to work with us we have a quick and easy way to put your mind at ease: a lifetime guarantee!
No need to be concerned about things being done right, or potential consequences when you have a guarantee for life that our work will be done correctly. No expiration, no fine print, if we make a mistake then we are going to make it right! In years of being in business, we have never had a client take advantage of it because we just do things right!
For a layman’s guide to the employee retention tax credit check out our roadmap below:
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