New Guidance from IRS on Supply Chain Causation Test for Employee Retention Credit
In a recent memorandum, the IRS clarifies that supply chain issues alone do not automatically qualify a business for the ERC. This reaffirms the accuracy of our position and commitment to only working on claims that meet the Objective revenue tests outlined by the IRS. Archetype Consulting Group is committed to the integrity of the ERC and ensuring that clients meet all requirements in order to qualify.
ERC Qualification Specifications Per the Internal Revenue Service:
To qualify for the ERC under the supply chain causation test, a business must demonstrate that the supply chain disruption was directly caused by a government order related to COVID-19. This requires showing that a supplier was closed due to a government order and that the employer cannot obtain needed supplies from another source. Documentation supporting this will be crucial as incorrectly claiming the ERC under this test or any other subjective method can result in significant penalties and even criminal charges.
IRS Audits With the ERC:
This memorandum outlines the importance for businesses to recognize that not all disruptions automatically make them eligible for the credit. Additionally, for those who have already received their checks, the burden of proof rests on the business owner to validate their claim. We expect that there will continue to be further clarification on the ERC subjective claims that have consequences retroactively. This is why it is vital for business owners to understand that seeking guidance from experts specializing in these tax credits is highly recommended.
Why Choose ACG to File Your ECR Refund:
At ACG, we have always prioritized our clients by only working on those claims that meet the Objective Revenue Tests. We only file claims that are in compliance with the regulations per the IRS. Our experts stay up to date on all information released directly from the IRS in order to best serve our clients and their businesses. Our commitment to our clients extends beyond just the ERTC credit, as we will always prioritize their needs and safeguard their interests.
