After claiming the Employee Retention Credit (“ERC” or “ERTC”) for your business, it is possible that you will receive Notice CP271 from the IRS. This Notice provides information to help employers confirm their eligibility to claim the ERC and includes instructions on withdrawing or amending an ERC claim.
Notice CP271 recommends that your company confirm its eligibility for the ERC prior to it being processed. The notice specifies which amended quarterly returns to focus on and asks that eligibility and amounts be reviewed. If the claims are reviewed and determined to be accurate, no action is needed.
The Notice includes an abbreviated ERC eligibility checklist, including the following:
Additionally, the Notice describes the ERC requirements as they pertain to PPP loans as well as allowable amounts that may be claimed per quarter. If your company is in receipt of Notice CP271, it is a good idea to ensure your eligibility and confirm the amounts claimed with the help of trusted tax professionals. If during the review process it is determined that either eligibility or the amount claimed was incorrectly determined, further steps are required to amend or withdraw the claim.
It is possible the Notice CP271 will be followed by Letter 6612, which officially places your ERC claim under pre-audit. This means that you will be required to supply documentation backing your claim prior to its disbursement.
