We are reporting that several well known and national non-payroll tax credit, accounting, and payment processing companies are attempting to lure payroll sales professionals across the industry into referring Employee Retention Credit business to their organizations.
These companies are promising large commissions to the payroll insider of up to 15% of the amount of the ERC refund. How can they afford to pay such high commissions? Because they charge in excess of up to 30% to the employer. One may ask... what's wrong with that?
The answer is nothing; on its face. However, FPC is seeing more and more clients come to us to correct Employee Retention Credit filings because these companies are incentivized by huge payouts to maximize the amount of ERC refunds they can acquire for the referred clients. In all cases, the claims for ERC were vastly overstated due to non-qualification or the absence of not factoring in ERC wage limits, PPP forgiven loans, and/or owners wages. Why should payroll sales organizations care?
Because when the IRS begins auditing down to the level of the small business employer, the payroll sales rep could be held liable both personally and by extension their employer for knowingly profiting and defrauding the U.S. Government. The punishment is not only incarceration and fines, but also irrevocable damage to your brand.