Employee Retention Credit a Due Diligence Snag for M&A

The IRS has sounded the alarm multiple times over the past year about widespread scams associated with the employee retention credit—a pandemic-era tax incentive meant to encourage businesses to retain their employees during the worst of the Covid-19 crisis. Still, advertisements by third-party bad actors promoting the credit persisted, and faulty employee retention credit claims became so prevalent that in March, the IRS put the employee retention credit on its "Dirty Dozen" list of scams. The issue of false or incorrectly claimed credits has begun to bleed into the world of mergers and acquisitions, prolonging deals and creating more hours of due diligence work. On this week's episode of Talking Tax, Bloomberg Tax reporter Lauren Vella sits down with Jenn McCabe, a partner at Armanino LLP, to hear about the fallout from what was meant as a pandemic rescue plan. Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.