Frost Law
A Professional Employer Organization (PEO) is a company that provides outsourced human resource services, handling payroll, employee benefits, workers' compensation, and other administrative tasks for businesses. While PEOs may offer small businesses cost savings and compliance expertise, there are some limitations when it comes to filing for and following up on Employee Retention Credit (ERC) refund claims.
If your business used a PEO to file employment tax returns in 2020 and 2021, administratively it must rely on the PEO to file the amended returns to claim the ERC. Unlike businesses that file Form 941-X directly with the IRS, PEOs file a Form 941-X under their Employer Identification Number (EIN) inclusive of a Schedule R, which includes details specific to its customers. This can create challenges because, in most cases, multiple businesses are listed on a single Schedule R and attached to a single Form 941-X, making it difficult for any individual business owner to access their own filing details.
A common complaint among businesses that have used a PEO for ERC filings is the lack of individualized communication and case-specific updates. Several PEOs send out generic email updates without providing critical details about the status of a customer’s specific ERC claim. This lack of transparency leaves business owners in the dark, unable to verify their claim’s status.
One solution is for businesses who use a PEO to request are redacted copy of the Schedule R so they have relevant details pertaining to at least their business’s inclusion on an amended return. An account transcript provided by the PEO would also provide evidence that the claim was filed along with its status. However, some PEOs have chosen not to provide their customers with copies of the Schedule R, even in redacted form, which leaves businesses with no independent verification of their claim filings. In these situations, clients must take the PEO’s word that their ERC claims were submitted correctly and on time. This lack of transparency may put businesses at risk, particularly given the heightened scrutiny around ERC claims for credit and pending expiration of the statute of limitations.
If you used a PEO to file for ERC and are struggling to obtain clear, specific information about your claim, you may need to seek legal advice. The complexities of ERC filings through PEOs can create significant risks for businesses. Legal counsel can help you navigate these challenges.
At Frost Law, we understand the complications that arise when dealing with PEOs and ERC claims. Our experienced legal team is here to help you assess your situation, advocate for your rights, and evaluate options to ensure your business is protected. Contact us today at (410) 431-2629 or schedule a confidential consultation.
A Professional Employer Organization (PEO) is a company that provides outsourced human resource services, handling payroll, employee benefits, workers' compensation, and other administrative tasks for businesses. While PEOs may offer small businesses cost savings and compliance expertise, there are some limitations when it comes to filing for and following up on Employee Retention Credit (ERC) refund claims.
If your business used a PEO to file employment tax returns in 2020 and 2021, administratively it must rely on the PEO to file the amended returns to claim the ERC. Unlike businesses that file Form 941-X directly with the IRS, PEOs file a Form 941-X under their Employer Identification Number (EIN) inclusive of a Schedule R, which includes details specific to its customers. This can create challenges because, in most cases, multiple businesses are listed on a single Schedule R and attached to a single Form 941-X, making it difficult for any individual business owner to access their own filing details.
A common complaint among businesses that have used a PEO for ERC filings is the lack of individualized communication and case-specific updates. Several PEOs send out generic email updates without providing critical details about the status of a customer’s specific ERC claim. This lack of transparency leaves business owners in the dark, unable to verify their claim’s status.
One solution is for businesses who use a PEO to request are redacted copy of the Schedule R so they have relevant details pertaining to at least their business’s inclusion on an amended return. An account transcript provided by the PEO would also provide evidence that the claim was filed along with its status. However, some PEOs have chosen not to provide their customers with copies of the Schedule R, even in redacted form, which leaves businesses with no independent verification of their claim filings. In these situations, clients must take the PEO’s word that their ERC claims were submitted correctly and on time. This lack of transparency may put businesses at risk, particularly given the heightened scrutiny around ERC claims for credit and pending expiration of the statute of limitations.
If you used a PEO to file for ERC and are struggling to obtain clear, specific information about your claim, you may need to seek legal advice. The complexities of ERC filings through PEOs can create significant risks for businesses. Legal counsel can help you navigate these challenges.
At Frost Law, we understand the complications that arise when dealing with PEOs and ERC claims. Our experienced legal team is here to help you assess your situation, advocate for your rights, and evaluate options to ensure your business is protected. Contact us today at (410) 431-2629 or schedule a confidential consultation.
