Key Takeaways
- Taxpayers have 30 days to produce extensive documentation.
- Fast action is essential.
Eide Bailly has seen a surge in Employee Retention Credit claim examinations in the last few weeks.
Typically the IRS notifies ERC claimants of the exam using Letter 6612, sent from IRS “Pre-Refund Verification Units”. The letters ask for extensive and detailed information to support the ERC claims.
The letter gives taxpayers only 30 days to provide this extensive documentation. Firms across the country and industry media report a similar surge in correspondence examinations.
What you need to know
The IRS requires a response within 30 days. Clients should immediately take action and consult their trusted tax advisors to start assembling the required documentation. The response should detail the clients’ qualification for the credit and provide supporting calculations.
Can we get an extension to respond to the letter?
The letter 6612 lists a telephone number to call -- but it is not answered, and you can only leave a voicemail. The automated IRS response states that the IRS team has 5 days to respond to messages left at the number, which eats into the 30-day window. Reports so far indicate that the IRS is not extending the 30-day deadline.
Taxpayers often do not realize the importance of consulting a trusted tax advisor to assist in responding to these notices. The IRS views this as the main opportunity for taxpayers to prove their ERC eligibility. Fast action is essential.
Eide Bailly has a dedicated team to handle ERC controversy matters, with expertise in ERC qualification rules and IRS exam procedures. If you need our assistance, please contact us.
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