There is important action you must take on your ERC claim. Many announcements on ERC have been released and we will share those updates in more detail in this post.
What is most important right now is ensuring that your legal and valid claim gets paid. We are in an election year. You want to be sure your claim is expedited and processed before this election, if possible. How do you do this? First, we’ve included a 6-minute video summary and then detailed instructions in writing below.
FIRST ACTION: Contact your elected officials
1a. It is imperative to contact your local representatives in Congress and the Senate right away. This is working. People are getting their claims processed and paid. Your representatives can actually request to have your claim expedited on your behalf. To look up your official, you can find their information here: https://www.usa.gov/elected-
1b. Here is a link to two templates we have drafted for you, one to your Congressperson and one to your Senator. Once you have customized these letters, you can email them to your elected officials or send them in the mail.
SECOND ACTION: Consider filing a claim of hardship with the IRS
2a. If this delay in receiving your ERC check has created a financial hardship for you or your business, you can request to expedite your claim with form 911 (claim of hardship) utilizing the Taxpayer Advocate service. Here is a link to this form for you to file with the IRS (you can mail or fax it –full directions are on the form). All forms are responded to within 30 days. Please inform SpiderERC if you decide to file a claim of hardship.
2b. If you choose to take both actions, we recommend that you file your hardship claim and include it with your letter to both government representatives.
THIRD ACTION: Keep SpiderERC informed of your IRS communications
3a. Provide us with any letters you have received or submitted to the IRSor elected officials in regards to ERC immediately so they may be added to your documentation of your claim. This includes copies of either actions above, as it may change how we ensure ongoing compliance with the IRS for your claim.
3b. Ensure you have given SpiderERC a form 8821 (Declaration of Representative) so that we may follow up on your hardship filing or ERC filing on your behalf.
Why do we need form 8821? Here is a message directly from the IRS: “Taxpayers: If you wish to have a representative act on your behalf, you must give him/her power of attorney or tax information authorization for the tax return(s) and period(s) involved. For additional information see Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization, and the accompanying instructions.”
THE FULL DETAILED UPDATE:
We wanted to reach out with some updates on the ERC. There is some good news. The IRS has said they are processing low risk claims from before September 14th, 2023. It is believed that these will be processed in the order in which they were received. We have been hearing news of people receiving their ERC checks in the last few weeks. Keep in mind there are an estimated 1.4 million unprocessed claims.
The IRS has really dropped the ball on their administration of ERC. They are not fulfilling their duty to the American people or small businesses. And they are not abiding by the law that Congress has passed assigning them to process and distribute the ERC.
The IRS is being sued from a number of different angles and there are US government representatives that have listened and spoken up for their constituents. The IRS takes action based on fear and pressure. They seem to take action and move forward on ERC when the voices are loud (which they are right now). Between lawsuits and elected officials speaking up, claims processing is beginning to move after nearly a year of delays.
The IRS has created fear around ERC for small businesses, including outrageous and impossible claims that 60%-70% of claims are mid-level risk and 10%-20% are high risk for fraud. They claim that only 10%-20% of claims are low-risk and will be immediately paid out.
In direct response to these lies, the IRS is now being sued under the Freedom of Information Act. The only ways the IRS could have identified potential fraud would have been comparing the reported wages on an original 941 to the amended 941X, or doing a deep dive into the full claim. It is now being said that the IRS never even looked at the claims and completely made up this accusation of widespread fraud, causing delays and inciting a new bill that failed based on this false claim.
In fact, the most common ERC fraudulence is actually businesses who filed for ERC who had no employees at all and/or made up wages on their 941X and “invented employees.” The IRS has already pursued these ERC companies and claimants who were committing widespread fraud. I’m sure you have noticed the rapid closure of many ERC companies over the last year.
Clearly, none of the claims that SpiderERC have complied fall into the high-risk category. Because our claims are all legitimate and documented with meticulous detail, we have nothing to be concerned about. We are a small firm and not a big “ERC mill”/”Promoter.” We are not on the radar for the IRS to investigate as a company. The big hitters out there will have their clients under intense scrutiny because they have engaged in unlawful and dishonest practices either by sheer negligence or malintent. In actuality, we have a good relationship with the IRS agents we have worked with, and have assisted in training them at many times throughout the process when they had questions.
Here is what will likely transpire this summer:
If you filed your claim before September 14th of 2023 and/or you follow the action steps we have laid out above, you will most likely be processed this summer or early fall.
What is also possible is that you will receive a letter from the IRS requesting additional information about your claim or asking you to prove your identity. Sometimes they have even asked people to come in person to prove their identity.
The goal of these letters is to delay the processing of ERC in hopes that people will not notice the letters, not have anyone to support them, or just be too afraid to move forward with the action they are requesting and therefore the claim becomes abandoned. This is not an audit. The IRS does not have the resources to perform an audit on even 1% of taxpayers. And with ERC, they have their hands full with actual criminals and blatantly fraudulent claims. This communication is merely a request for information to document or support your claim. If you receive any communication like this or any other, then please reach out to us immediately so that we can provide you with the documentation and necessary information to complete a response in a timely manner. We understand for some of you, receiving a letter from the IRS can bring fear. They are counting on that fear paralyzing you so the claim never has to be completed. This is why we are here. We will walk with you through every part of this journey.
Finally, now that checks are rolling again, we want to remind you of the two payment options for SpiderERC’s service fee. We had offered a reduced percentage of our professional services fee in the beginning for those that want to pay us upfront. Should you choose this discounted option, there is no risk. If for some reason your claim is found to be incorrect and not paid, the upfront fee would be returned to you in full. If you are interested in more details please reach out to us and we can look at the specific huge savings this option may bring to you.
In Continued Service,
The SpiderERC Team