Virginia Business Owners Still Need to Be Concerned About ERC and PPP Fraud in 2025

If you have lingering concerns about your business’ Paycheck Protection Program (PPP) or Employee Retention Credit (ERC) filings, you are not alone. Numerous businesses submitted improper ERC and PPP claims during and after the COVID-19 pandemic. Whether an improper claim was intentional or inadvertent, it can lead to serious consequences, and the Internal Revenue Service (IRS) is continuing to target ERC and PPP fraud heading into 2025. Learn more from Virginia criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.

When Can Businesses (and Their Owners) Face Scrutiny for ERC or PPP Fraud?

Allegations of ERC and PPP fraud can take many different forms. The IRS is targeting taxpayers suspected of all forms of fraud, and it is doing so in both civil tax audits and criminal tax fraud investigations. Some examples of potential allegations in these audits and investigations include:

• Submitting a PPP loan application for a non-qualifying business
• Submitting falsified or forged documents in support of a fraudulent PPP loan application
• Using PPP loan funds for unauthorized purposes
• Submitting a fraudulent PPP loan forgiveness certification
• Claiming the ERC for a non-qualifying business
• Falsifying payroll or employment records in support of a fraudulent ERC filing
• Improperly calculating the ERC in one or more calendar quarters

Again, these are just examples. The IRS is seeking to recover tens of billions of dollars in improperly received pandemic-era benefits—if not more. Official estimates put the total cost of pandemic-era fraud to taxpayers at more than $2 trillion.

What Are the Risks of Facing an ERC or PPP Fraud Investigation?

Let’s say the IRS targets your business (or you personally) in an ERC or PPP fraud investigation. What are the risks involved?

These investigations can lead to a variety of serious federal charges. In the past few months alone, IRS Criminal Investigation (IRS CI) has announced indictments, guilty pleas, and convictions for crimes including:

• Wire fraud
• Bank fraud
• Money laundering
• Engaging in monetary transactions in criminally derived property
• Tax evasion and tax fraud
• False statements
• Conspiracy

Along with restitution liability, these charges carry substantial fines and years, if not decades, of federal prison time. As a result, the risks of facing scrutiny are severe, and business owners who have concerns should do what they can to resolve any ERC or PPP-related concerns before they trigger federal scrutiny.

How Can Businesses (and Their Owners) Avoid Facing Scrutiny from the IRS?

What can business owners do to avoid facing scrutiny from the IRS? The answer to this question depends on the specific circumstances at hand. While the IRS’ ERC Voluntary Disclosure Program has closed, other options remain available. Choosing the best option under the circumstances at hand is critical. If business owners aren’t careful, they can tip off the IRS to potential ERC or PPP-related concerns—and at this stage, it can become too late to take remedial action.

Discuss Your Options with Virginia Criminal Tax Lawyer Kevin E. Thorn in Confidence

Do you have concerns about facing ERC or PPP-related scrutiny? If so, we encourage you to contact us promptly. To discuss your options with Virginia criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, in confidence, call 703-752-3752 or request an appointment online today.