ERC Frequently Asked Questions

The ERC Audit Defense is a service provided by Azarvand Tax Law to assist businesses in defending their ERC claims during IRS audits. Given the complexity of ERC eligibility requirements and the increasing scrutiny from the IRS, businesses may face challenges in defending their claims and generally need legal counsel to navigate the audit process effectively.

Azarvand Tax Law provides comprehensive support throughout the audit process, including legal representation, documentation preparation, and strategic audit defense planning.

The Azarvand Tax Law team leverages their extensive knowledge of ERC guidance, legislative changes, and the relevant IRS procedures to advocate for the client's interests and ensure compliance with all relevant laws and guidelines.

An ERC audit can result in significant liabilities, including repayment of the ERC amounts claimed, penalties, and interest. In some cases, there may also be criminal penalties imposed.

Azarvand Tax Law helps mitigate these ERC audit risks by conducting thorough assessments of the client's ERC claims, identifying potential issues or areas of vulnerability, and developing robust defense strategies to defend clients from adverse audit outcomes.

The total cost of ERC Audit Defense services varies depending on the complexity of the case and the level of assistance required. ERC audits are charged on an hourly basis as follows:

• Attorneys$375 / hour
• CPAs$175 / hour
• Law Clerks$200 / hour
• Paralegals$75 / hour
• Bookkeepers$95 / hour

Azarvand Tax Law offers transparent pricing structures and can provide tailored cost estimates based on the client's specific needs.

The upfront investment to cover your expenses offers potential savings and protection from future costly audit findings, making it a prudent safeguard investment for businesses claiming ERC.

In order to meet substantiation requirements, businesses should gather and organize all relevant documentation related to their ERC claims, including, but not limited to payroll records, profit and loss statements, PPP loan forgiveness calculations, ERC calculations, and applicable government orders.

Azarvand Tax Law assists with this preparation process by conducting a comprehensive review of the client's documentation, identifying deficiencies, and advising on corrective actions to strengthen the client's position during the audit.

Any business that filed for the ERC is at risk of an audit and should ensure that they are keeping their ERC records intact throughout the duration of the applicable audit statute of limitations.

The statute of limitations depends on the quarter and has changed due to new legislation. For 2020 claims (Q2–Q4 2020) and Q1–Q2 2021 claims, the statute of limitations has already expired — April 15, 2024 and April 15, 2025, respectively. The IRS can no longer audit these periods. For Q3 and Q4 2021, the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, extended the audit period to six years from the later of: (1) the date the original return was filed, (2) the date the return is treated as filed, or (3) the date the ERC refund was received. Note: The Tax Relief for American Families and Workers Act of 2024, which would have extended the SOL to six years for all periods, never passed the Senate and is not law.

No. All ERC filing deadlines have passed. The deadline for 2020 claims was April 15, 2024, and the deadline for 2021 claims was April 15, 2025. No new ERC claims can be filed at this time. If you have not yet filed and believe you were eligible, consult a tax attorney to understand whether any options remain.

No. Under the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, the IRS is legally prohibited from paying or refunding Q3 and Q4 2021 ERC claims that were filed after January 31, 2024 — even if the business was otherwise eligible for the credit. If your claim falls into this category, contact a tax attorney to discuss your options, including whether an appeal is possible.

Yes. The OBBBA added a 20% penalty under § 6676 of the Internal Revenue Code for erroneous ERC refund claims on employment tax returns. This penalty applies in addition to having to repay the credit, plus interest. Businesses that received ERC refunds they may not have been fully entitled to should consult a tax attorney to assess their exposure.