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Potential tax scam targeting small businesses
FOX 26 Business Reporter Tom Zizka has more on the scam that's targeting small businesses.
HOUSTON - There's another scam-alert to be aware of, this time for small business owners. It begins with insistent phone messages offering help with collecting thousands of dollars in tax-credits.
The message might seem like an honest mistake, "I'm just doing a follow-up call on your business refund," it begins. Except, when nearly a dozen messages, from different numbers, offer the same scripted pitch, there may be reason to be suspect.
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They're calling because, "It still looks here like your business will most likely receive a refund of up to $26,000 for every employee you kept on payroll for the years 2020 and, or 2021."
Houston CPA Ed Gardner says the basic premise of the calls is correct, "It is a credit that employer 'could' get."
As part of the federal government's response to the economic hardships of the Covid pandemic, the Cares Act offers financial assistance to businesses that kept employees on their payrolls, with credits up to $26,000 dollars, per employee, depending on a series of complicated circumstances.
Most of the toll-free numbers that were offered ended with a busy signal, while one suggested it would include international tolls to connect.
Gardner says a cottage industry has grown to take advantage of business owners trying to navigate the tax-credit. He warns being careful before doing business with such people.
"Some of them are charging big up-front fees, and they're saying that you qualify," he says. "How do they know that you qualify? They say you can figure it in just a couple minutes, but you have to go through (complicated) ratios and calculations if you are eligible."
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To be fair, there's little indication what it would have cost to use the services, since they didn't answer the call back. The one that appeared to be an international connection, however, doesn't leave a lot of confidence.
The IRS does have a lot of warnings about these sorts of services. Ed Gardner echoes them, saying an up-front charge, or a percentage of the potential refund, is a big red flag to steer clear.