Potomac Law Partner Derek Adams Quoted in Law360 Article Regarding the Employee Retention Credit

Partner Derek Adams is quoted in a Law360 article titled “Employers Might Not Rush to Withdraw Worker Credit Claims," in which he discusses the impact of the IRS’s Employee Retention Credit (“ERC”) Withdrawal Program, announced on October 19.

Adams and other partners on Potomac Law’s ERC Team, including Tax Partner Susan Rogers, Tax Litigation Partner Richard “Jake” Gagnon, M&A Partner Laurent Campo and Tax Partner Lisa Poole, have been handling ERC-related matters since the pandemic-era tax credit was first passed as part of the Coronavirus, Aid, Relief, and Economic Security (“CARES”) Act, enacted March 27, 2020. Although the credit is a valuable and beneficial relief program for businesses and nonprofits that qualify, and can potentially net millions of dollars for some, its rules are complex and the credit has earned a top spot on the IRS’s “Dirty Dozen” list given widespread fraud associated with ERC-promoters.

The IRS’s Withdrawal Program follows an announced moratorium on new claims, and is the IRS’s latest attempt to incentivize taxpayers to reevaluate qualification and potentially withdraw claims following submission.

Adams told Law360, however, “I don’t see this program really moving the needle much,” as he noted that taxpayers generally think their claims for the credit are valid until a trusted advisor, accountant or lawyer tells them there’s a problem. While the new program streamlines the withdrawal process, Adams does not expect it to result in significant taxpayer use.

Potomac Law’s ERC Team represents clients facing IRS audit following ERC claims, clients seeking assistance to determine potential qualification prior to submission, and clients involved in disputes with third-party ERC-promoters that led taxpayers astray and caused them to inappropriately claim credits.