Recent news articles constantly mention AI and how the use of Artificial Intelligence will disrupt industries and cost employees their jobs. We wanted to see what all the fuss was about, so we decided to give it a try. We took a current topic that has been trending on the internet, abuse of the Employee Retention Credit (ERC,) and the fact that this abuse has landed the ERC on the IRS Dirty Dozen list of annual tax scams. We went to Microsoft’s version of ChatGPT, which you can try on the Bing search engine. We typed in the following instructions, “Write a blog post one page long about how the ERTC is being abused and has landed on the IRS dirty dozen list.” Less than 30 seconds later the following result was produced.
Introduction
The Employee Retention Tax Credit (ERTC) is a refundable tax credit that was introduced by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. The ERTC is designed to help businesses keep employees on their payroll during the COVID-19 pandemic.
Eligibility criteria for ERTC
To be eligible for the ERTC, businesses must meet certain criteria. For example, businesses must have experienced a significant decline in gross receipts or have been fully or partially suspended due to government orders related to COVID-19. Additionally, businesses with 500 or fewer employees are eligible for the credit.
How the ERTC is being abused
Unfortunately, some businesses are abusing the ERTC. The IRS has added widely circulating promoter claims involving Employee Retention Tax Credits (ERTC) as a new entry in the annual “Dirty Dozen” list of tax scams. These promotions can be based on inaccurate information related to eligibility for and computation of the credit.
The IRS dirty dozen list
The IRS dirty dozen list is an annual list of tax scams that taxpayers should be aware of. The list includes a variety of scams, including phishing scams, fake charities, and abusive tax shelters.
Conclusion
In conclusion, while the ERTC is designed to help businesses keep employees on their payroll during the COVID-19 pandemic, it is important to be aware of how it can be abused. By understanding the eligibility criteria for the credit and being aware of potential scams, businesses can take advantage of the ERTC while avoiding potential legal issues.
The content is a little thin on specifics, but the artificial intelligence blog post took less than one minute to create after I posted my query. I am not sure anyone at the payroll company has anything to worry about just yet, but if I was a content writer for websites, blogs, and other social media I would either be worried or excited that I could handle twice as many clients.
In conclusion, filing for the ERC has about a year to go before the ability to file expires. There are many unscrupulous firms soliciting small businesses to let them file for them, whether the small business is eligible or not. Checkright has worked with hundreds of small businesses that have successfully filed for and received the ERC, and has also told dozens more small businesses that they did not qualify. Let us know if we can answer any questions on the program and eligibility.
And give AI a try-its pretty cool!
About the author: Arch Wallace is the President and founder of Checkright and has spent almost 20 years employed in the accounting and payroll industry. He can be reached at archw@checkright.net.