PPP and ERC Fraud Remain Top Priorities for the IRS Heading Into 2025

Earlier this year, the Internal Revenue Service (IRS) published a News Release touting its efforts to uncover and prosecute pandemic-era fraud. Since then, it has issued numerous additional News Releases highlighting specific enforcement actions involving the Paycheck Protection Program (PPP) and Employee Retention Credit (ERC). As a result, it is clear that PPP and ERC fraud remain top priorities for the IRS heading into 2025. Learn more from Boston criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.

The IRS is Continuing to Target All Forms of Pandemic-Era Fraud

Given the scope of the fraud perpetrated under the PPP and ERC (among other pandemic-era programs), the IRS and its Criminal Investigation division (IRS CI) are actively pursuing audits and investigations targeting all types of fraudulent filings. Here are just a handful of examples of enforcement actions from the past few months:

• In September, a defendant was convicted of obtaining more than $11.2 million in fraudulent PPP loans and then laundering the loan proceeds. He was convicted of multiple federal crimes and faces well over 100 years of prison time.
• In October, a defendant pleaded guilty to obtaining more than $465,000 in fraudulent PPP loans for herself, her husband, and two businesses they owned. Charged with wire fraud and money laundering, she faces up to $500,000 in fines and 30 years of imprisonment.
• In November, IRS CI announced charges against a defendant accused of fraudulently obtaining more than $700,000 in PPP loans for himself and others. If convicted, the defendant faces well over $1 million in criminal fines and 60 years of imprisonment.
• In November, a federal grand jury indicted three defendants accused of perpetrating a $1.4 million PPP loan fraud scheme. The indictment includes 13 counts of conspiracy, wire fraud, bankruptcy fraud, tax evasion, and other crimes.
• In November, another federal grand jury indicted two tax preparers accused of fraudulently obtaining more than $65 million in COVID-19 relief funds for themselves and others. The charges against them include offenses related to both PPP and ERC fraud, and a conviction on all counts could effectively amount to a life sentence.

While most of these examples involve allegations related to the PPP, there are just as many examples—if not more—of IRS CI investigations targeting fraudulent ERC claims. Both PPP and ERC fraud present similar risks, as they can both lead to charges for tax fraud, wire fraud, money laundering, and other serious federal offenses.

Avoiding IRS CI Scrutiny for PPP or ERC Fraud in 2025

With this in mind, what should you do if you have concerns about your (or your company’s) PPP or ERC filings heading into 2025? In this scenario, it is critical to take proactive measures. To find out what you can do to mitigate your risk, you should speak with a Boston criminal tax lawyer as soon as possible.  

Request a Confidential Consultation with Boston Criminal Tax Lawyer Kevin E. Thorn

If you have concerns about facing scrutiny relating to a PPP or ERC claim, we encourage you to contact us promptly. Call 617-692-2989 or contact us confidentially online to request an appointment with Boston criminal tax lawyer Kevin E. Thorn.