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ARTICLE · 28 AUGUST 2025

ERC Audits Are Escalating: What CFOs Need To Know

MGO CPA LLP
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For most companies that claimed the Employee Retention Credit (ERC), the checks have long since cleared. But now the IRS is focusing on next steps — eligibility, substantiation, and calculation accuracy.

United StatesEmployment and HR
Danielle Bradley, MBA
Danielle Bradley, MBA
Ron Martin
Ron Martin
Michael Silvio
Michael Silvio
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Key Takeaways:

  • The IRS has prioritized ERC enforcement — focusing on eligibility, substantiation, and promoter-prepared claims.
  • Many mid-market companies are under review or unclear on their ERC position, especially for Q3 2021 (a red flag for audits).
  • CFOs should proactively review ERC filings, gather documentation, and consult with advisors to manage risk and avoid penalties.

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For most companies that claimed the Employee Retention Credit (ERC), the checks have long since cleared. But now the IRS is focusing on next steps — eligibility, substantiation, and calculation accuracy. Enforcement is no longer theoretical; it's already happening.

Thanks to extended statutes of limitations, expanded audit budgets, and a public crackdown on abuse, ERC compliance has become one of the IRS's highest priority areas.

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