Brotman Law May 11, 2024 17 min read

Why Hire an Employee Retention Tax Credit Attorney to Assist Your Business

The Value That Attorneys Bring to the Employee Retention Tax Credit Process

Navigating the world of business taxes can be a daunting task. Especially when it comes to claiming tax credits like the Employee Retention Tax Credit (ERTC).

The ERTC is a valuable incentive for businesses. It can significantly reduce your tax liability and boost your bottom line. But claiming it isn't always straightforward.

The rules are complex, and the stakes are high. Mistakes can lead to missed opportunities or even costly audits. That's where an employee retention tax credit attorney comes in.

An attorney specializing in this area can guide you through the process. They can help you maximize your credit and defend you in case of an audit.

In this article, we'll explore why hiring an employee retention tax credit attorney is a smart move for your business. Let's dive in.

Understanding the Employee Retention Tax Credit (ERTC)

The Employee Retention Tax Credit (ERTC) is a federal tax credit. It's designed to encourage businesses to keep employees on their payroll during challenging economic times.

The ERTC was first introduced in the CARES Act in 2020. It was then extended and expanded in the Consolidated Appropriations Act in 2021. The goal is to provide financial relief to businesses affected by the COVID-19 pandemic.

The credit is calculated based on a percentage of qualified wages paid to employees. But determining whether or not you qualify and calculating the credit can be complex. It involves understanding intricate tax laws and IRS guidance.

Here are some key aspects of the ERTC:

  • A refundable tax credit against certain employment taxes.
  • The credit applies to qualified wages paid after March 12, 2020, and before January 1, 2022.
  • The maximum credit amount per employee is $7,000 per quarter in 2021.
  • Eligibility depends on business size, reduction in business operations, and decline in gross receipts.

Understanding these details is crucial to claim the ERTC correctly. And that's where an employee retention tax credit attorney can be invaluable.

The Complexities of ERTC Eligibility and Claims

The process for claiming the ERTC is not as simple as it might seem. The eligibility criteria are complex and can be confusing for many businesses.

For example, a business can qualify if it was closed or limited by government orders because of COVID-19. But what does "partially suspended" mean? The IRS provides some guidance, but it's not always clear-cut.

Another eligibility criterion is a significant decline in gross receipts. But how do you calculate this decline? And what time periods should you compare? These are questions that need careful consideration.

Then there's the issue of qualified wages. Not all wages qualify for the ERTC. The rules differ depending on the size of the business and the specific time period.

Navigating these complexities can be daunting. It's easy to make mistakes that could lead to missed credits or even IRS audits. That's why having an employee retention tax credit attorney on your side can be a game-changer.

Common Pitfalls in ERTC Applications and How to Avoid Them

Applying for the ERTC can be a minefield of potential mistakes. One common pitfall is misunderstanding the eligibility criteria. This can lead to claiming the credit when you're not eligible, or missing out on it when you are.

Another common mistake is miscalculating the credit. The ERTC is based on a percentage of qualified wages, up to a certain limit. But calculating these wages can be tricky, especially for businesses with fluctuating employee numbers or hours.

Documentation errors are another common issue. The IRS requires specific documentation to substantiate your claim. If you do not provide the right documents, or if they are incomplete or incorrect, the company could deny your claim.

Avoiding these pitfalls can be challenging, especially for businesses without in-depth tax knowledge. That's where an employee retention tax credit attorney can make a significant impact. They can guide you through the process, helping you avoid mistakes and maximize your credit.

The Role of an Employee Retention Tax Credit Attorney

An employee retention tax credit attorney is a legal expert specializing in tax credits. They have a deep understanding of the ERTC, its eligibility criteria, and the claim process. They can guide your business through the complexities of the ERTC, helping you maximize your credit and avoid costly mistakes.

One of the key roles of an ERTC attorney is to ensure your business meets all the eligibility requirements. They can conduct a thorough review of your business's situation, identifying any potential issues that could affect your claim.

An ERTC attorney can also assist in computing the credit. This process includes identifying the eligible wages and applying the appropriate percentage. Although it's a complicated procedure, a lawyer can guarantee its accurate execution, optimizing your credit.

In addition, an ERTC attorney can assist with the documentation required for the claim. They can ensure you have all the necessary documents, and that they're complete and correct. This can help prevent the denial of your claim due to documentation errors.

Finally, an ERTC attorney can represent your business in case of an IRS audit. They can defend your claim, negotiate with the IRS, and help resolve any issues that arise. This can provide peace of mind and protect your business's financial interests.

An employee retention tax credit attorney can help your business maximize its ERTC. They have the knowledge and experience to identify all eligible wages and calculate the correct credit amount. This can result in a significant financial benefit for your business.

An attorney can also help you navigate the complexities of the ERTC. They can interpret the IRS guidance, explain the rules in plain language, and provide clear advice. This can help you understand the ERTC better and make informed decisions.

In addition, an attorney can help you avoid costly mistakes. They can ensure your claim is accurate, complete, and compliant with the tax laws. This can prevent denial or reduction of your claim, and protect your business from potential penalties.

Finally, an attorney can provide strategic advice on the ERTC. They can help you plan for future tax credits, optimize your tax strategy, and support your business's growth. This can give your business a competitive edge and contribute to its long-term success.

The IRS may audit your ERTC claim to ensure it's valid and compliant. This can be a daunting process, but an employee retention tax credit attorney can guide you through it. They can represent your business, respond to IRS inquiries, and defend your claim.

An attorney can also help you prepare for an audit. They can review your claim, check your documentation, and identify any potential issues. This can help you address any problems before the audit and reduce the risk of negative outcomes.

If the IRS challenges your claim, an attorney can fight for your rights. They can argue your case, negotiate with the IRS, and seek a favorable resolution. This can help you protect your ERTC and avoid unnecessary financial losses.

In addition, an attorney can help you handle any legal challenges related to the ERTC. They can interpret the tax laws, advise you on legal issues, and represent your business in any disputes. This can help you navigate the legal complexities of the ERTC and ensure that your business is treated fairly.

Finally, an attorney can provide ongoing legal support. They can keep you updated on changes to the ERTC, advise you on new tax credits, and help you plan for future audits. This can help your business stay compliant, maximize its tax benefits, and prepare for any potential challenges.

The Financial Impact: A Cost-Benefit Analysis of Hiring an Attorney

Hiring an employee retention tax credit attorney is an investment. It may seem like an added expense, but it can save your business money in the long run. An attorney can help you maximize your ERTC, avoid costly mistakes, and defend your claim in an audit.

An attorney can also help you avoid penalties and fines. If you make a mistake in your ERTC claim, the IRS may impose penalties. These can be significant and can harm your business's financial health. An attorney can help you avoid these risks and ensure your claim is compliant.

In addition, an attorney can save you time. The ERTC claim process can be complex and time-consuming. An attorney can handle this process for you, allowing you to focus on running your business. This can save you time and resources, which can be better spent on your core business activities.

Finally, an attorney can provide peace of mind. Knowing that your ERTC claim is in the hands of a legal expert can reduce stress and uncertainty. This can be invaluable for business owners, who often have many responsibilities and challenges to manage.

Case Studies: Success Stories with ERTC Attorneys

There are many success stories of businesses benefiting from hiring an employee retention tax credit attorney. For instance, a small manufacturing company was able to claim a significant ERTC with the help of an attorney. The attorney helped them with the claim process, making sure they met all the requirements and gave all the needed documents.

In another case, a retail business faced an IRS audit related to their ERTC claim. Their attorney successfully defended their claim, preventing penalties and preserving their tax credit. These cases illustrate the value an attorney can bring to the ERTC claim process.

Remember, every business's situation is unique. An experienced attorney can provide personalized advice and guidance, tailored to your business's specific needs and circumstances.

Choosing the Right Employee Retention Tax Credit Attorney for Your Business

Choosing the right employee retention tax credit attorney is crucial for your business. You need someone with a deep understanding of tax law and the ERTC. They should have a proven track record in handling ERTC claims and audits.

The lawyer should be able to explain complicated tax concepts in a way that you can easily understand. They should be responsive and proactive, keeping you informed of any changes in tax laws that could affect your claim.

Remember, the right attorney can make the difference between a successful ERTC claim and a stressful, costly audit. Choose wisely.

Hiring an employee retention tax credit attorney is not just about navigating the complexities of the ERTC. Gaining a strategic advantage for your business is what it's about. An attorney can help you maximize your tax credits, avoid costly mistakes, and plan for future tax incentives.

In the face of ever-changing tax laws, having a legal expert on your side can provide peace of mind. You can focus on running your business, knowing that your tax matters are in capable hands.

In conclusion, an employee retention tax credit attorney is a valuable asset for any business. They can help you navigate the ERTC, defend against audits, and plan for a financially stable future.




"Sam is a wonderful, results-oriented and extremely knowledgeable and talented attorney, who really has 'heart' in working on behalf of his clients, and explains options in a straightforward, respectful manner. He has assisted us with great outcomes which have added to our quality of life. I would not hesitate to recommend Sam for his services as he is an ethical, personable and expert attorney in his field. You will likely not be disappointed with Sam's work ethic, approach and his efforts."

-Aileen Dwight, Licensed Clinical Social Worker & Psychotherapist

Last updated: May 18, 2024

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