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IRS Says Watch Out for ERC Scams, E-File Your 3rd Quarter Returns and Tax Records Available to Disaster Victims

Thomson Reuters Tax & Accounting  

· 5 minute read

Thomson Reuters Tax & Accounting  

· 5 minute read

On October 19, the IRS issued news releases and a Tax Tip of interest to employers and payroll practitioners.

Employee Retention Credit Scam Alert.

In IR 2022-183, the IRS is warning employers to watch out for third parties advising them to claim the Employee Retention Credit (ERC), when they may not actually qualify for the credit by disregarding the taxpayer’s eligibility or proper calculation of the credit. These bad actors will ask for a large up-front fee based on the amount of a refund without explaining that wage deductions claimed on the business’ federal income tax return must be reduced by the amount of the credit.

Employers should file an amended return to correct overstated wage deductions if qualified wages were deducted before the an employment tax return was filed claiming the credit.

Businesses should be on guard and not fall prey to advertised schemes and direct solicitations. Employers remain liable for the reporting and payment of employment tax regardless if a third-party should administer the taxes on their behalf. Erroneous claiming of the ERC will lead to not only repaying the credit but will include penalties and interest.

For further information on how to claim the ERC, see Payroll Guide ¶20,905.

IRS Urges Electronic filing of Third Quarter Payroll Returns.

In IR 2022-184, the IRS is urging employers to file the third quarter payroll tax return, due October 31, electronically. The IRS points out that electronic filing is a time-saving method as well as a secure way to file returns. With e-filing, forms and schedules are auto-populated and step-by-step calculations are performed. A receipt is generated for e-filed returns within 24 hours.

Payroll tax returns can be filed by purchasing IRS-approved software or by hiring a tax professional to file returns.

Tax record retrieval after a disaster.

The IRS has issued Tax Tip 2022-160 to advise businesses that rebuilding records should be a priority after a disaster. The IRS is reminding businesses that free tax return transcripts can be obtained through Get Transcript on or by calling the IRS at (800) 908-9946.


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