Bogus 'tax service specialists' duped business owners in latest Covid relief debacle, IRS says
IRS officials say the Employee Retention Tax Credit program has been a magnet for unscrupulous promoters who filed a "tsunami of bad claims."
When the pandemic upended daily life in his small Missouri town, small-business owner Scott Volner went into overdrive to keep his employees on the payroll, despite a drop in revenue.
Then he started to get bombarded by telemarketers who were claiming to be “tax service specialists,” telling him he qualified for a special IRS pandemic relief credit. Among hundreds of calls and emails, he signed up with a company and agreed to pay a 10% fee. He ended up with a check for $330,000 — money he plowed back into his business.
“They are promoting it, and they have the service to put the whole package together for you so you don’t have to fill out the forms,” said Volner, who runs a fertilizer business in Rolla, Missouri.
But it turned out Volner wasn’t eligible for what’s known as the Employee Retention Tax Credit, or ERC, which has very specific and narrow criteria. For one, the credit is available only to business owners based in states where there were mandatory shutdowns.
Now Volner has to figure out how to pay back money he has already spent.
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