ERC Fraud: IRS Office of Promoter Investigations Targets Those Suspected of Facilitating Fraudulent Filings

The Internal Revenue Service (IRS) isn’t just targeting businesses suspected of submitting fraudulent Employee Retention Credit (ERC) claims. Through its Office of Promoter Investigations, it is also targeting individuals and firms suspected of facilitating fraudulent filings. Learn more From New Jersey IRS lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.

ERC Promoter Fraud is a Top Enforcement Priority in 2024

The IRS has made clear that targeting ERC fraud is among its top enforcement priorities for 2024 (and this will likely remain the case 2025). While this includes targeting businesses suspected of filing fraudulent ERC claims, it also includes targeting individuals and firms suspected of promoting ERC fraud.

Fraud under the ERC program has been an issue since the program’s launch in 2020. To date, the IRS has placed much of the blame on what it calls fraudulent ERC promotion schemes. Essentially, the IRS is accusing tax preparers, accountants and other individuals of encouraging business owners (and, in some cases, non-business owners) to file ERC claims despite being ineligible to do so.

While taxpayers are ultimately responsible for the contents of their returns, the IRS’s Office of Promoter Investigations focuses on targeting those suspected of encouraging and facilitating fraudulent filings—whom the IRS collectively calls “promoters.” The Office of Promoter Investigations conducts both civil and criminal inquiries—and it works with the U.S. Department of Justice (DOJ) to pursue criminal charges when warranted.

Potential Penalties for Promoting ERC Fraud

The potential penalties for promoting ERC fraud depend on whether the Office of Promoter Investigations decides to pursue civil or criminal allegations. In civil enforcement cases, the IRS can impose a variety of monetary penalties depending on the specific allegations involved. In criminal enforcement cases, the potential penalties also depend on the specific allegations involved, though they generally include both fines and prison time.

What To Do if You Have Been Contacted By the IRS Office of Promoter Investigations

With these risks in mind, if you have been contacted by the IRS Office of Promoter Investigations in relation to alleged ERC fraud, you should consult with a New Jersey IRS lawyer as soon as possible. An experienced lawyer will be able to communicate with IRS personnel on your behalf while helping you implement a targeted defense strategy.

Even if you are responsible for promoting ERC fraud, this doesn’t necessarily mean that you should expect to face charges. There are a variety of potential defenses available—including both defenses focused on settlement and defenses focused on avoiding liability entirely.

Confidentially Contact New Jersey IRS Lawyer Kevin E. Thorn

If you need to know more about your options for defending against an ERC-related inquiry from the IRS Office of Promoter Investigations, we encourage you to contact us promptly. To request a confidential consultation with New Jersey IRS lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, call us at 201-842-7696 or contact us confidentially online today.