We've heard the radio ads. We've seen the tweets. Many small business owners and others even ended up being flooded with spam calls about how an employee retention credit — worth up to $26,000 per worker — can be a real game changer.
If you're hungry for cash, you might be primed to imagine that this tax break can work for anyone who was forced to keep working during the pandemic. Pretty good deal.
But it can't be real, right?
Yep, if it sounds wacky, it probably is — and you might lose a bunch of money along the way.
One problem chasing the big money promoted in a tweet or a radio ad is that it could mean that you'll end up handing out big money in upfront fees to fast talkers who don't tell you the real deal. And you could run into trouble with the Internal Revenue Service.
If you claim the credit when you shouldn't, you could have to pay it back — plus interest and penalties. Some small businesses could end up owing hundreds of thousands of dollars or more if they file an improper claim.
The IRS is warning, once again, that some outside companies are aggressively marketing tax credit schemes on radio and social media. Worse yet, people could be arguing with their tax professionals about why they suddenly deserve these credits when, no, they actually don't.
The IRS stated: "Tax professionals note they continue to be pressured by people wanting to claim credits improperly."
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