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As you may know, the IRS requires that anyone claiming the 2020 employee retention credit (ERC) adjust their 2020 wages on their tax returns accordingly. It appears that the IRS has not yet processed your ERC claim

employee retention credit (ERC)

Despite the uncertainty of the timing of the credit’s approval, it’s crucial to proceed with the amendment to comply with tax laws and avoid potential penalties.

Our records show that the statute of limitations for your 2020 individual federal tax return expires on May 17, 2024. Given this deadline, you should have us amend your return to reflect the 2020 ERC, even though you have not received the funds. This action is necessary to ensure compliance with Section 2301(e) of the CARES Act and IRC Section 280C(a).

Additionally, I recommend filing a protective claim simultaneously to safeguard against the possibility that the IRS might reject your ERC claim or approve a lesser amount. The protective claim ensures a tax refund after the statute of limitations expires for the wages adjusted should the IRS deny or reduce your ERC claim.

Here’s what we need to do for you if you approve:


  1. Amend and file your 2020 tax return before the May 17, 2024, deadline.
  2. File a protective claim to cover scenarios where the ERC is less than anticipated or denied.

I understand these steps might seem burdensome, especially during uncertain times. But the steps are crucial for ensuring compliance and minimizing potential financial impacts.