Due to the intricate nature of the Employee Retention Credit (ERC) program, many processing companies find it challenging to substantiate claims for their clients. This lack of expertise can hinder these ERC processors from securing funding for their files, leading to restricted cash flow. With the IRS currently dealing with a backlog of over 1 million files, potential funding times could extend to a year or more. Recent legislation has introduced penalties, including an increased penalty for aiding and abetting the understatement of tax liability related to ERC claims, requiring a retraction of 75% of the commissions received. Alongside potential financial losses, these companies also face the risk of criminal charges. Ensuring the repair of all ERC files becomes crucial for ERC processing companies to mitigate risks and align with evolving regulations.

By relying on ERC Repair to meticulously substantiate these files, ERC processors can steer clear of substantial financial risks stemming from IRS clawbacks and potential criminal charges. Additionally, properly substantiating the client's file can facilitate avenues for financing files, thereby aiding in the ERC processor's cash flow.