When Claiming the Employee Retention Credit (ERC) Doesn’t Pay

By Kelley R. Taylor A tax preparer arrested for $124 million in alleged fake employee retention tax credit claims highlights IRS concerns about the ERC program. The employee retention credit (ERC) has been in the news. The IRS is warning taxpayers about ERC refund scams and ramping up enforcement to root out false claims for the pandemic-related tax break. Recently, in a case that highlights the IRS’ deep concerns about the ERC program, the U.S. Department of Justice arrested a New Jersey tax preparer for allegedly seeking more than $124 million from the IRS. The multimillions at issue came from filings of over 1,000 false tax forms claiming the employee retention tax credit. Tax preparer arrested in ERC fraud case According to a release from the U.S. Attorney’s Office from the District of New Jersey: · A tax preparer in New Jersey, Leon Haynes, received over $1 million in fraudulent tax refund checks from the U.S. Treasury Department. · The Treasury also disbursed at least $31.6 million in tax refunds to Haynes’ clients based on false tax form filings. · The preparer charged clients up to a 15% fee based on the tax refunds they received. Many of those clients reportedly paid in cash. “While our country was fighting the spread of the virus and its profound economic impact, Haynes allegedly scammed the system in a massive scheme to line his own pockets,” U.S. Attorney Philip R. Sellinger stated in a release about the arrest. READ FULL ARTICLE >>