Note: Innovation Refunds is no longer accepting new ERC refund applications. Contact Innovation Refunds for more information.
To learn more about Innovation Refunds and decide if it’s right for your needs, please continue reading:
Businesses affected by the Covid-19 pandemic can still file for the Employee Retention Tax Credit. The little-known program can provide up to $26,000 per employee for wages paid in 2020 and 2021.
Many business owners are still unaware of the program or if they’re eligible to claim the credit. Tax specialist companies like Innovation Refunds help businesses determine eligibility and apply to the IRS.
However, Innovation Refunds might not be the right fit for all small businesses. It charges a hefty fee, only works with enterprises that meet a minimum number of employees, and doesn’t offer an ERC advance. To qualify for the Employee Retention Credit, businesses must show revenue losses through a gross receipts test or prove they were impacted by government orders.
Additionally, the Employee Retention Credit is available only to businesses that experienced mandatory shutdowns during the pandemic. This review can help you decide if Innovation Refunds is right for your ERC filing needs.
Specifically, we’ll answer these questions and more:
Innovation Refunds is a tax specialist company that helps small and medium-sized businesses (SMBs) claim the Employee Retention Credit, abbreviated ERC or ERTC.
It consists of CPAs and tax attorneys who use their expertise to ensure accuracy when helping businesses apply for the ERC. Although its only service is assisting SMBs in obtaining the tax credit, it has helped thousands of companies receive over $5 billion in tax refunds by guiding them through the entire process of securing refunds.
Innovation Refunds is based in West Des Moines, Iowa, but its services are available nationwide.
ERC tax credits were enacted under the CARES Act as a tax incentive for businesses to retain employees during the COVID-19 pandemic. They are still lesser known, as PPP loans were spotlighted during the pandemic.
Initially, businesses that received PPP loans were ineligible for ERC tax credits. However, amendments to the program allowed some to claim the refund even if they also received PPP loans.
The federal government played a crucial role in enacting the ERC program, significantly impacting businesses by providing financial relief during the pandemic.
The program ended in the fall of 2021, but SMBs can retroactively apply for the credit for wages paid during 2020 and the first three quarters of 2021. But businesses must apply before the deadline.
SMBs have until April 15, 2024, to apply for the ERC for 2020, and until April 15, 2025, to apply for the credit for 2021. Businesses could receive up to $26,000 per employee:
Navigating the complexities of the Employee Retention Credit (ERC) program can be daunting for many small businesses. This is where the expertise of a tax professional becomes invaluable. A seasoned tax professional can help ensure that your business is eligible for the credit and guide you through the intricate application process, providing insights into the program’s specific requirements and helping you avoid potential pitfalls.
Innovation Refunds underscores the importance of collaborating with independent tax attorneys and professionals. By partnering with these experts, Innovation Refunds can offer businesses accurate and reliable guidance on the ERC program. This collaboration ensures that businesses receive the maximum benefit from the ERC while staying compliant with IRS regulations. Innovation Refunds relies on independent tax attorneys to determine eligibility for tax credits. The IRS has not published estimates of the percentage of taxpayers expected to qualify for the Employee Retention Credit.
However, it’s crucial to be discerning when selecting a tax professional. Some companies, such as ERC Specialists, have faced accusations of promoting the ERC program to ineligible businesses, resulting in a surge of questionable claims. Promoters of tax refund scams often promise money with little risk to the business owner, further complicating the landscape for legitimate claims. Telemarketers have increasingly targeted small businesses claiming eligibility for relief credits, adding to the confusion and potential for fraud. Many small businesses have reported feeling pressured by aggressive marketing tactics from promoters.
Fraudsters exploited the rush for pandemic relief funds, filing inaccurate claims. The IRS is investigating a cottage industry that emerged to promote pandemic relief programs to small business owners. This has prompted the IRS to launch investigations into these promoters, and businesses that have filed inaccurate claims may be required to repay the funds. Additionally, the IRS has warned about potential scams related to the ERC, indicating that promoters target small businesses that may not qualify for the credit. The IRS is conducting thousands of audits to review the legitimacy of ERC claims, further emphasizing the need for accurate and compliant filings.
To avoid such issues, businesses should work with reputable tax professionals who have a proven track record with the ERC program. These professionals can help you navigate the complexities of the program, ensuring that your claims are accurate and compliant with IRS regulations. Doing so lets you confidently pursue your ERC refund, knowing you are in good hands.
Small and medium-sized businesses are crucial to America’s economic landscape and contribute significantly to job creation, making programs like the ERC vital for their recovery and growth. Many promoters of the ERC claimed that a significant percentage of small businesses would qualify, creating pressure for businesses to apply.
Applying for the ERC is a complicated process. The conditions for what wages qualify are challenging to understand. Businesses must file an amended Form 941, and the accompanying documentation can total over 170 pages.
Innovation Refunds seeks to simplify the process for small business owners. You complete their online form, and Innovation Refunds lets you know if you’re eligible.
Some users finally called Innovation Refunds after initial delays and found the service helpful. The company’s team of tax professionals will work with you to complete the tax credit application process and produce the necessary documents. There are no upfront payments, and you get a free, no-obligation ERC analysis.
If you qualify for the ERC, Innovation Refunds takes a 25% fee from your refund or tax credit for its services. While that’s a steeper payment than some of its competitors, you get a dedicated account specialist and free audit support.
Unlike similar accounting and tax prep companies that can help with ERC applications, Innovation Refunds does not offer additional accounting or tax services, such as payroll, bookkeeping, or general tax prep and filing for its clients. The program has attracted predatory promoters who sometimes take a large percentage of the refund for their services.
The qualifications for an eligible employer depend on the period during which the qualified wages were paid. It is crucial to consult an independent tax professional to determine your eligibility and navigate the complexities of the Employee Retention Tax Credit. Small businesses that apply for the ERC must submit accurate claims, as submitting incorrect claims could result in financial penalties if audited. To address improperly filed claims, the IRS has introduced initiatives to help business owners, including a special option to withdraw claims.
To qualify for the tax credit on qualified wages between March 13 and December 21, 2020, your company must have carried on trade or have been a tax-exempt organization that:
Additionally, businesses must demonstrate revenue losses through a gross receipts test or prove they were impacted by government orders.
Businesses applying for the ERC for wages between January 1, 2021, and September 30, 2021, must meet the following conditions:
One of the primary benefits of Innovation Refunds is the simple and streamlined process. It provides a quick and convenient online form to determine eligibility for the ERC tax credit.
You’ll enter information about your company, including how the shutdowns during the pandemic affected it. Once you submit the information, Innovation Refunds will determine if you’re eligible.
An account specialist will then contact you about completing the process to apply for the ERC credit.
The company charges 25% of your ERC refund amount as its fee. This is higher than some of its competitors, who charge 10-15% on average. However, some companies might charge over 25%.
There are no upfront costs or hidden fees. You’ll never have to pay out-of-pocket as Innovation Refunds takes its fee directly from the refund.
The primary advantage of Innovation Refunds is that it offers a simple, streamlined, and stress-free way to apply for the ERC. The expedited claims process removes the burden of applying for the credit from business owners.
Completing the online form provides free, no-obligation ERC analysis. There are no upfront or hidden fees.
Innovation Refunds’ team of CPAs and tax attorneys and mission of focusing solely on ERC refunds mean you’re getting expert support. It offers dedicated account specialists to assist you.
The most significant drawback is the cost. Filing through Innovation Refunds means you’ll pay the company 25% of your ERC refund. In addition, it doesn’t work with businesses with fewer than four employees.
It doesn’t offer other services like accounting, bookkeeping, or tax prep. While its sole focus on ERC refunds can be good, it means Innovation Refunds won’t be a good fit for companies seeking additional payroll or tax services.
Innovation Refunds also doesn’t offer any ERC advance. You’ll have to wait 6-12 months for your refund or tax credit.
Pros:
Cons:
Yes, Innovation Refunds is a legitimate business. It’s a verified company on Trustpilot and has multiple online reviews.
Innovation Refunds has very positive customer reviews. It has a 4.9 out of 5 rating on over 230 Google Reviews and a 4.9 out of 5 rating on over 400 Trustpilot reviews.
Many reviews give the company 5 stars. Customer service is available by online form, email, and phone.
The positive reviews mention how easy the process was. Multiple customers said it saved time and could get a refund when other companies said they wouldn’t qualify.
Many customers mentioned how helpful, professional, knowledgeable, and responsive the specialists were. Several mentioned their account specialist by name.
The negative reviews discussed the hefty fee and the required number of employees. A few stated they were told they would qualify, only to be denied because they don’t have enough employees.
Other negative customer reviews complained about being denied without explanation. Several customer complaints said the company didn’t respond after they sent their tax information. Some customers also expressed frustration over unanswered phone calls and the lack of responsiveness. Innovation Refunds faced negative customer reviews due to poor customer service responsiveness, which has been a recurring issue for some clients.
Additionally, clients have reported receiving invoices and communications long after resolving their claims with the IRS. Innovation Refunds promised seamless processes but faced criticism for delays and poor communication.
No, Innovation Refunds does not offer an ERC advance. The IRS is currently experiencing a backlog of requests. The wait time to receive the funds you’re owed is 6 -12 months. IRS Commissioner Danny Werfel has expressed concerns about the backlog and significant fraudulent claims within the ERC program, leading to increased scrutiny and a moratorium on new applications. Many former employees described a culture of aggressive sales at Innovation Refunds, which may have contributed to the challenges faced by the company.
Following regulatory changes, Innovation Refunds experienced massive layoffs, affecting over 40% of its staff. The Department of Justice has charged thousands of individuals related to fraudulent pandemic relief claims, highlighting the scale of the issue. The IRS suspended the processing of ERC applications due to concerns over fraud and ineligibility. The IRS has launched at least 400 criminal investigations related to fraudulent ERC claims, highlighting the scale of the issue.
You can apply for an ERC loan advance through UCS and receive your funds within 1-2 weeks. You can use the money for various business purposes, such as investing in growth, paying down debt, or hiring new employees.
Innovation Refunds is best suited for small businesses interested in the ERC tax refund but don’t know where to start. It also helps if you’re undaunted by the 25% fee and can afford to wait 6-12 months to receive the money. The IRS has recovered $500 million in fraudulent ERC claims and continues to seek additional recovery, underscoring the importance of working with reputable services to ensure compliance.
Businesses with an in-house CPA or other tax professionals can likely navigate filing for an ERC credit independently or using a service that charges less. In addition, if you need the funds sooner, you must work with a company that offers ERC advances to get what you’re owed sooner.
Based on the available services, costs, and user reviews, we rate Innovation Refunds as a 4 out of 5. It’s a good resource if you’re willing to pay more to work with an organization that offers CPAs and other tax experts.
Disclaimer: The Innovation Refunds trademark is owned by Innovation Refunds LLC, and its use herein is for reference purposes only, and it does not indicate sponsorship or endorsement from Innovation Refunds LLC.
Fraud Disclosure:
Please be aware that individuals have been fraudulently misrepresenting to business owners (and others) that United Capital Source, Inc. (“UCS”) can assist small businesses in receiving government grants and other forgivable business loans, when in fact those grants or loans do not exist or are not available. These individuals have ulterior motives and are engaging in the unauthorized use of the names, trademarks, domain names, and logos of UCS in an attempt to commit fraud upon unsuspecting small business owners.
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