New Employee Retention Credit Phenomenon

I’ve been completing and filing payroll tax returns for thirty years. I never had a problem before about six months ago. All of a sudden the IRS started getting picky, asking ridiculous questions.

Think about it. For twenty-nine plus years the IRS was predictable in how they processed returns, and now they become difficult. Why? The answer is academic.

Six months ago, instead of us paying them, they needed to begin paying us.

Really? Now they’re going to become a pain? Somehow this was sadly predictable.

It seems as if our friends at the Service now have agents whose only job is to send out denial letters for simple errors that never before were an issue. I’ve had five new customers who tried to file for the Employee Retention Credit on their own, bring me their denial letters.

One was denied because he moved. Technically speaking, when you change your address, you’re supposed to file a change of address form with the service.

Another had forgotten the direction when typing in his address. It was something like 3227 Bryn Mawr instead of the correct one which is 3227 West Bryn Mawr.

One had signed the form with the wrong title. They have a corporation and should have signed it as a “President”. Instead they wrote “Owner”.

None of these mundane problems were an issue when the IRS was taking our money. Now that they need to write a check, these issues have become somehow apocalyptic. We’ve learned from these mistakes, and even a couple of our own.

In processing these credits, there are a couple of things that must be understood.

Timely Filing

The ERC System was originally set up for timely filing, and this is the way that it works best. An electronically filed 941 followed up a couple of days later with the faxed 7200 works quite easily. Clients are getting their money in fifteen or twenty days with little or no issues.

Untimely Filing

The legislation signed in January allows for the untimely filing or amendment of a 941 to claim an Employee Retention Credit. The process is taking anywhere from three to four months. One must be patient. The 941X or amendment cannot be electronically filed.

I know I mentioned in one of my communications that this was how we would handle them, but I was wrong. This form cannot be electronically filed.

Whether we’re claiming the credit on an older quarter or if your payroll service has already filed your current Payroll Tax Return, we will need to amend. This amendment will take time but it will work.

We may need to go back a second time, but ultimately we will get the results that we need. Our Consulting and Preparation Program has an automatic set of amendments, if necessary, at no additional charge. You may sign up by clicking the button below.

Let me leave you with this.

It’s Friday, and time to relax. It looks like our weather will be a little rainy, but when has any Midwesterner let a little rain ruin a weekend?

Take some time for yourself. Read a book. Walk the lakefront. Catch up on some spring cleaning. Hit a ball game. Do something that makes you happy. Recharge your batteries.

Then put your arms around the people you love. This has been a scary time for them too. Let them know how much you care and how special they truly are.

My daughter turns twenty-one tomorrow. I’m not quite sure how to handle being old enough to have a child who can legally drink. We’ll celebrate with a cake here at the office, then go to her favorite restaurant. She’ll go out with her friends tomorrow night. I ordered a limo, so that I won’t worry. I guess I really am too old to go clubbing.

They launched my sailboat a couple of days ago. I have a forty-six-year-old single masted sloop. I’ll go down to Montrose harbor and rig my sails. Hopefully the weather gods will smile, and I’ll be able to take her out for my first sail of the season. It’s been far too long.

My point is that we’ve all been through a lot in this nightmare, and it seems as if things are loosening up. Leadership is difficult. Those of us who are capable need to take the time necessary to clear our minds and feed our souls so that we can do what everyone around us needs.

Clear your mind so that you can lead.

We’re all going to get through this. Let’s get through it together.

Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. If there is anything you need, whether you are a current client or not, you have but to ask. I’m here and I remain,

Sincerely yours,

Chris Amundson
Accounting Solutions Ltd.

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