The Internal Revenue Services has extended the use of Form 3949-A, Information Referral to anonymously report fraudulent Employee Retention Credit claims by third-party vendors. The form had previously been used to anonymously report other forms of tax fraud.
Established nearly three years ago as part of a Covid-19 Relief package, ERCs were designed to help businesses deal with the pandemic.
The new form capability drew praise from the American Institute of.CPAs, which said members had complained of “the rise of non-CPA ERC vendors taking inappropriately aggressive positions”
These vendors are submitting claims on behalf of businesses unknowingly unqualified or qualified for a much smaller credit. Contingency fees of up to 25 percent of the claimed credit are being charged.
A statement from AICPA CEO Barry Melancon, who called the program “hugely beneficial”, said “For more than a year, the AICPA has communicated its concerns to the IRS and the Department of the Treasury regarding the unscrupulous business practices of ERC mills, and we are encouraged by this acknowledgement by the IRS of these questionable business practices around the ERC,
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards. Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that. A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
