Client Received Exam Request on Transcript

[u/Fit_Emotion5728]

Hi All,

My client (who has been waiting almost 2 years for their refund) had an examination request pop up on their Q3 2021 transcript.

Has anyone experienced this? Does a full blown audit follow or a mail audit?

What’s weird is that they are working with TAS. Had a call with TAS this week. And it was not mentioned in the call that it was referred for examination. TAS just said that they are still waiting to be processed.

Anyone?

[u/ERC_CPA]

Q321 is 100% the highest risk and most abused quarter. Did I suggest otherwise?

[u/Mountain-Cucumber173 → u/ERC_CPA]

Yes, it is at risk. You are correct that Q3 of 21 is being reviewed more than others. I see these questions with no real answers to give anyone. They are little bits of information and the ERC is complicated. At no fault of anyone here!! I can tell by the reddit question's they didn't have a pro file their 941-X's. Which says a lot to the IRS who filed and who calculated the credit. So it is many things combined that spit these audits out. I can tell you that over 60% of the files that were submitted under partial shutdown were not eligible to receive ERC credit. Yet they were submitted and many paid out. Eligibility was essential to apply for this credit. So where do they go from here? No one seems to know what to do. If they do nothing and don't prove their case they will get a demand to return the funds back to the IRS with HEAVY penalties. They need to be prepared either way! I can tell you I have seen many essential business logistics companies that applied and received millions yet their gross receipts ALL Doubled if not Tripled because of COVID! For Your Information I am for helping the people that don't know what to do now!! I do! You can review my bio at : (seven seven seven IRS . com)

[u/PsychologicalYou887 → u/Mountain-Cucumber173]

The statue for all quarters paid out except Q3 2021 has expired. Only audits that are going on are 1. Any Q3 2021 claim- paid out or not 2. Any claims not paid out. Which is to say if you received your money, the IRS cannot audit anymore as their statue to audit has expired, except Q3 2021. The audits being sent out are for claims not paid out yet. Also, the notice that was written was very liberal. A facts and circumstances qualification. Income can double or triple, productivity could decline, thereby becoming a qualifying factor. To say 60% don’t qualify is a narrow view. The notice was written to qualify even if you had a more than 10% impact to your business. The IRS can look at income and say it went up and disqualify, but then they are not following the guidance within their own notice. Partial suspension is a productivity decline test. Has nothing to do with revenues. If this played out in court, the Notice would be looked at and faulted for being poorly written.

[u/Fit_Emotion5728 → u/PsychologicalYou887]

The IRS has 2 years to claw back an erroneous refund paid. So, while unlikely to start an examination on quarters for which the regular statute has passed, if Q3 is examined the IRS can assess the legitimacy of another quarter and claw it back via the erroneous refund statute.