A temporary tax break for small businesses has spawned a cottage industry of advisory firms tapping into federal pandemic aid, raising alarms at the Internal Revenue Service that some claims are going beyond what the law allows, the Wall Street Journal reported. The Paycheck Protection Program and other federal aid programs long ago shut their doors. But small businesses and nonprofits battered by COVID-19 can still use a lesser-known lifeline, the employee-retention tax credit, or ERC. Businesses can claim up to $26,000 per employee in refunds by amending payroll tax returns from 2020 and 2021. An array of firms have popped up with the express goal of getting more businesses to file ERC claims. They are using radio spots, online ads and cold calls to compete with one another and with traditional accounting firms, payroll companies and tax credit specialists. The IRS has already paid out more than $58 billion in ERC claims.
