Beware of phone calls urging businesses to take advantage of federal tax credits that reach as high as $26,000 per employee.

The Internal Revenue Service warns against the unprompted calls, which push ineligible businesses to file for an “employee tax credit.”

The calls are robotic and they can be relentless. Businesses have reported as many a five calls a day for consecutive days. Oftentimes the caller introduces themselves as “virtual assistant” (a robot.)

The IRS said large upfront fees are charged, or a fee that is contingent on the amount of the refund.

Callers will help victims amend their tax form and resubmit it. Accountants can get roped into the scheme because underlying tax documents, such as forms 941, must also be amended, and accountants are held responsible.

Far from every business qualifies for the credit — only those that continued to pay employees while their operations were suspended by order of the government and sustained a significant decline in tax receipts, according to the IRS.

Also, if employers deducted wages on the federal income tax form, the deduction must be reduced by the amount of the retention credit.

The calls are an outgrowth of COVID-19 relief programs in 2020 and 2021, such as the paycheck protection program. The “employee retention credit” on business taxes was designed to reimburse businesses that continued paying employees while business was shut down during the pandemic, or who had significant declines in gross receipts from March 13, 2020 – Dec. 31, 2021, the IRS said.

As it turns out, eligible businesses technically can still claim the ERC on an employment tax return within those dates. And, hustlers are all-too-ready to take advantage of the situation.

“People need to think twice before claiming this. Anyone who is considering claiming this credit needs to carefully review the guidelines,” Acting IRS Commissioner Doug O’Donnell said. “If the tax professional they’re using raises questions about the accuracy of the Employee Retention Credit claim, people should listen to their advice.”

O’Donnell said the IRS is actively auditing and conducting criminal investigations related to these false claims.

Go to IRS.gov to learn more about eligibility requirements and how to legitimately claim the Employee Retention Credit.

Employers should report instances of fraud and IRS-related phishing attempts to the IRS at phishing@irs.gov and Treasury Inspector General for Tax Administration at 800-366-4484.

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