My ERC Company Went Out of Business - What Do I Do?

You filed an ERC claim through a company that promised expert service, and now they're gone—phone disconnected, website down, emails bouncing. Unfortunately, this scenario is increasingly common as many ERC mills have closed their doors, leaving clients without documentation, support, or answers. Here's what you need to know and do.

You're Still Responsible for Your Claim

This is the most important thing to understand: You, the business owner, are legally responsible for the accuracy of your ERC claim—not the preparer. The IRS holds you accountable regardless of who filed the paperwork.

This means if the IRS audits or denies your claim, you're the one who must respond, defend your eligibility, and face any consequences.

Immediate Steps to Take

If your ERC preparer has disappeared, take these steps right away:

1. Check your claim status: Call the IRS at (800) 829-4933 to see if your claim is pending, processed, or under review.
2. Request your IRS transcripts: Get copies of your business tax transcripts to see what was actually filed in your name.
3. Gather what documentation you have: Collect any paperwork, emails, or contracts from the ERC company.
4. Contact your payroll provider: Request copies of the Forms 941-X that were filed on your behalf.
5. Review your bank records: Check if you received any ERC refund payments and when.
6. Assess your eligibility: Honestly evaluate whether you actually qualified for the ERC based on the real criteria.

Reconstructing Your Documentation

If the preparer took your documentation with them, you'll need to reconstruct it:

• Government orders: Research the federal, state, and local orders that were in effect during 2020-2021. These are public record.
• Gross receipts: Pull your accounting records to calculate quarterly revenue for 2019-2021.
• Payroll records: Your payroll provider should have complete records of wages paid.
• PPP documentation: Contact your bank for PPP loan and forgiveness records.
• Business impact evidence: Gather any records showing how your business was affected by COVID-19 restrictions.

Should You Withdraw Your Claim?

If your claim is still pending and you're unsure about your eligibility, you may want to consider withdrawing:

• When to withdraw: If you realize you didn't actually qualify or your preparer made false claims on your behalf, withdrawing avoids penalties.
• Withdrawal benefits: No penalties, no interest, the claim is treated as if it was never filed.
• When not to withdraw: If you legitimately qualified and have documentation, don't withdraw a valid claim out of fear.

Finding New Representation

A new tax professional can help you navigate this situation:

• ERC expertise: Look for someone who understands ERC eligibility rules and IRS audit procedures.
• IRS representation: Choose a CPA, Enrolled Agent, or tax attorney authorized to represent you before the IRS.
• Case assessment: A qualified professional can review your claim and tell you honestly if it was valid.
• Documentation help: They can help reconstruct files and prepare responses to IRS inquiries.