The Internal Revenue Service has labeled promoters of a popular pandemic-era tax credit as unscrupulous scammers. The agency’s task ahead: Turning that tough talk into victories in court, the Wall Street Journal reported. Tax lawyers say they expect several busy years defending tax-credit consulting firms and employers as the IRS tries to claw back some of the $230 billion it paid in employee-retention credits, or ERC refunds. The enforcement push, including criminal prosecutions, won’t be quick or easy for the IRS. “One acquittal is worse for the government than 1,000 guilty verdicts, because the acquittal spreads the word,” said Frank Agostino, a tax lawyer at Agostino & Associates in Hackensack, N.J. “The government needs to create the perception of invincibility." The tax agency has some advantages, including a flush enforcement budget and thousands of new staffers it is hiring. Attorneys say the IRS should be able to impose stiff penalties on some ERC firms that urged employers to seek refunds, despite the firms’ attempts to avoid signing returns and push crucial eligibility decisions onto clients.
