Employee Retention Credit (ERC) Second Opinion and Risk Assessment

If you have already claimed ERC for your business, you may now be questioning the accuracy of your claim—whether in terms of the amount or in terms of eligibility and substantiation—and our team of tax attorneys are here to help you. As skilled tax controversy attorneys, we have substantial experience with the audit process. We understand how best to respond to Form 4564, Information Document Request, and work with Revenue Agents in employment tax audits.

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Do You Need a Second Opinion on Your ERC?

The ERC incentivized businesses to retain employees throughout the pandemic with a refundable payroll tax credit that has been a lifeline for many employers. However, fly-by-night return preparers and payroll processors, lacking scruples and a clear understanding of the CARES Act and subsequent legislation, are pushing business owners into over, or even under, claiming ERC—and that can result in Form 941-X audits, which can then lead to serious consequences without proper documentation.
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Our team has tracked pandemic relief legislation from PPP and EIDL in the beginning, through ERC claims and more. We are happy to help you understand what your business may be eligible to claim and can provide a second opinion if necessary.

The ERC Risk Assessment Team

Who will help you through your ERC Claim?

Meet the tax attorneys who can help you understand what to expect when claiming the ERC and what to do if you are audited.

Partner Rebecca Sheppard, Esq.

As a former attorney for the Office of the Comptroller of Maryland, Rebecca’s current tax law practice is uniquely enhanced by the critical component of government perspective that she can offer when helping clients understand the full scope of what’s involved when maximizing tax credits and minimizing tax liabilities.

Partner Peter Haukebo, Esq.

Peter has provided individuals and businesses with sophisticated tax controversy assistance for more than a decade. In the ERC context, not only has Peter helped his own clients successfully navigate ERC requirements, he has committed countless hours to educating thousands of businesses, individuals, and other professionals across the nation about every aspect of the credit.

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Client testimonials

"I was referred to The Frost Law Firm through the National Restaurant Association for the ERC program. I am happy I chose them over the 100's of solicitations I have received over the past 6 months for the ERC program. The entire team at Frost Law were great to work with and always responded to any question I might have had. What also impressed me is that their fee did not increase when they informed me that my refund amount would be about double from the original amount and they did not charge me any additional fees to process my paperwork!  If you're reading reviews to determine who you want to represent you for the ERC program, you don't have to look any further!"

- Farmhouse KC
"Rebecca and her team at Frost Law were amazing. We met randomly through an online COVID business development series of webinars and she was so impressive, that I decided that I could trust her with my ERC filings. They did what was needed swiftly and professionally. I am in California and she in Maryland and there were no issues with that. I highly recommend Rebecca and her team for your tax needs even if she is in Maryland. I have even referred a client to her for another issue."

- Barbara K.
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Frequently asked questions

Frequently asked questions regarding what happens after you claim the employee retention credit and you get audit notification.

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What are the penalties if my ERC is audited?

When an employer is audited and ERC gets reduced, potential penalties may range from an accuracy-related 20% penalty to a 75% penalty if the IRS alleges civil fraud on the employer. In the worst of cases, the IRS may allege criminal fraud, which would have further penalties and possible imprisonment.

How long does the IRS have to audit ERC?

Typically, the IRS has 3 years from the date a return is filed to audit the return and identify other possible taxes owed or penalties. This holds true with ERC, though there is an exception of quarterly returns filed in Q3 &Q4 of 2021, which have a 5 year statute of limitations.

How can I be “audit-ready”?

To be audit-ready, we recommend that you review your records and return with an experienced team of tax professionals.  If the tax professional you are working with, or considering working with, is not willing or able to confirm and defend every aspect of the analysis in an ERC claim, you should find one who is. Some of the items we recommend reviewing include:
- Applicable aggregation rules
- Accuracy of the average full-time employee calculation 
- Full or partial suspension analysis
- Gross receipts test analysisAllocation of wages to more than one COVID relief program (i.e., PPP, RRF) to ensure no double-dipping resulted

How do I know if my ERC is being audited?

If an ERC gets audited, an IRS agent will most likely send you a letter informing you. You may also receive an Information Document Request (IDR), which is a request for specific documents or information that the IRS will use to evaluate your ERC claim.

What ERC experience does Frost Law have?

In the past year, Frost Law has helped over ____ businesses claim ERC and other money-saving tax programs. Since March of 2022(?), Partners Rebecca Shepherd and Peter Haukebo have focused solely on helping businesses find tax relief.