ERC Audit Risk Assessment
Check your claim against the 2026 IRS enforcement criteria before you receive an audit letter.
ERC Audit Risk Assessment
Analyze your exposure under 2026 IRS enforcement criteria.
The Deposition
1. Did you claim the exact same employee wages for both PPP loan forgiveness and the ERC?
This is known as "Double Dipping."
2. Was your claim based solely on "Supply Chain Issues" without a specific government order shutting you down?
3. Did you pay a "contingency fee" (e.g., 15-25% of your refund) to an ERC promoter or "mill"?
4. If you claimed a partial suspension, did the government order truly suspend more than a "nominal" part (10%+) of your business operations?
Revenue Decline Safe Harbors
Audit Risk Level
Your claim relies on aggressive interpretations heavily targeted by the IRS.
IRS Potential Liability
Voluntary Disclosure Program
Estimate savings using the 2026 IRS VDP
The 2026 ERC Crackdown: How Section 70605 Changes Everything
The 6-Year Statute of Limitations
If you claimed the Employee Retention Credit (ERC) during the pandemic, you might have assumed you were in the clear. However, under Section 70605 of the new legislation, the IRS has officially extended the statute of limitations for ERC audits to a full 6 years.
This means for claims filed for the 2021 tax year, the IRS has until 2027 to audit your business. With thousands of new agents deployed specifically for ERC enforcement, the wave of audits has reached unprecedented levels.
Top IRS Audit Red Flags
The IRS is not auditing at random; they are using data analytics to target specific vulnerabilities. If you used an "ERC Mill" (a promoter who charged a contingency fee), you are at elevated risk. The primary triggers include:
- Supply Chain Claims: Claiming a partial suspension based on "supply chain issues" without a very specific, localized government order is now an automatic disqualifier in most cases.
- Double Dipping: The IRS algorithms cross-reference ERC claims with SBA Paycheck Protection Program (PPP) forgiveness records. Claiming the same wages for both programs will result in immediate penalties.
- The "Nominal" Rule: To claim a partial shutdown, the suspended operations must have accounted for more than a "nominal" portion (at least 10%) of your gross receipts.
Employee Retention Credit Voluntary Disclosure
If our calculator flags your claim as "High" or "Critical" risk, you should immediately speak with an IRS tax attorney. The IRS continues to run the Voluntary Disclosure Program. By coming forward voluntarily before an audit begins, business owners can often waive the devastating 20% accuracy-related penalty and avoid criminal exposure.