Dear Valued Client,
We believe IRS Notice CP271 has gone out to all businesses who requested the ERC in 2023 and 2024. It is an informational message from the IRS. This notice indicates our clients are one step closer to receiving their funds. Some clients submitted claims in June of 2023 and have patiently waited. We would have reason to believe that this notice would indicate our clients – like millions of other businesses queued for ERC around the country – are close to getting funded.
Here is what the notice says:
In the notice, the IRS provides detailed information about the ERC and acknowledges that some aggressive promoters have been over-qualifying businesses that do not meet the eligibility criteria for the credit. We are proud to share that The Relief Consultants have only submitted credits which strictly abide by the Internal Revenue Code. The complete notice is posted below.
Note: No action is required at this time -- this notice was sent to every business who has requested ERC.
How to Know if You Were Overqualified for the ERC:
At TRC, our process starts with informing our clients about their maximum potential credit.
We then perform due diligence to determine how much of that maximum credit businesses can validly claim based on the stated eligibility criteria of the ERC. The final eligible amount could range from zero to the full maximum credit provided in our initial review.
For transparency, we have always provided insights whenever an eligibility criterion reduced a client's submissible credit from the maximum potential to a lesser amount. In 96% of ERC cases reviewed by TRC, clients qualified for only a percentage of the originally calculated maximum potential credit. Your credit likely falls within this range – and it is how you can suspect your credit is legitimate. If you'd like to know why your credit qualifies for the dollar amount down to the $0.01, reach out to your assigned Consultant.
Our approach has allowed our clients to rest assured that their credit is legitimate and calculated in accordance with the IRS's eligibility criteria. By working with The Relief Consultants, you have worked with a company who has done it the right way.
How Promoters Bilked the System:
It's important to be aware of how aggressive promoters cheated the system -- essentially why this notice doesn't apply to you and what this notice is referring to:
1. Ignoring Eligibility Criteria: Some promoters rightfully calculated the maximum potential credit but then requested an amount without considering reducing the claim to comply with code. This is often seen when firms consistently requested all six quarters of the credit, whereas only 4% of TRC's cases involved requests for credits in all six quarters. This small share was for businesses that legitimately qualified for all the quarters. An unlikely outcome -- but possible due to the rules.
2. Exceeding Mathematical Possibilities: Other promoters neglected even the basic due diligence of accurately calculating the maximum potential credit -- and then requested funds which exceeded the mathematically possible maximum for the company's payroll. This constitutes a complete abuse of the system.
How we were able to do it right:
While many firms in the ERC space have unfortunately fallen into the trap of negligent work, The Relief Consultants positioned ourselves to rise above because of the significant breakthrough we had in developing ERC related technology in 2022. Our custom-built ERC software solution, designed specifically around IRS compliance requirements, incorporated every relevant parameter which governed the ERC. Our system’s comprehensive approach covered a wide range of criteria, including but not limited to:
$5,000 cap in employee credit for calendar year 2020
$7,000 cap in employee credit for calendar quarters in 2021
Exclusion of owner wages and majority owner relative wages from consideration
Exclusion of any excess PPP funds disallowed in Notice 2021-20 IRC
Retroactive R&D Credit Consideration
FFCRA Covid Sick & Family Leave Consideration
Exclusions on any wages paid to employees after governmental order expirations
Limits to $50,000 per quarter for eligible startup recovery businesses in Q3 and Q4 of 2021
Our software solution promoted integrity in the ERC program by enabling our Consultants to easily account for eligibility criteria discovered throughout the credit assembly process. If a Consultant identified an item that potentially reduced a client's credit to remain compliant, they were able to swiftly update the credit using an input field in our software. This level of efficiency and accuracy was unparalleled in the industry, as many ERC firms outsourced work to third parties, leading to delays and friction when compliance adjustments were needed. In contrast, our software enabled Consultants to input compliance protocols at will – eliminating the friction that cultivated fraud & negligence purported by fly-by-night promoters. This standard set The Relief Consultants apart as a leader in the field.
Since 2020, The Relief Consultants have been dedicated to upholding the integrity and honesty of our clients within various government programs. We’re proud to announce we’ve done the same for ERC. We appreciate your trust in us and remain committed to providing excellent service through the ERC and beyond.
If you’d like to discuss your filing in depth, do not hesitate to reach out to your assigned Consultant.
IRS Notice CP271:
