On November 22, 2023, the Financial Crimes Enforcement Network (FinCEN) issued an alert in partnership with the Internal Revenue Service (IRS) Criminal Investigation (CI) division regarding the ongoing issue of COVID-19 Employee Retention Credit (ERC) fraud. This information, as detailed by legal news platform JDSupra, reveals FinCEN’s ongoing efforts to tackle fraud schemes that have targeted the ERC system during the COVID-19 crisis. You can find the full details here.
The recent alert reflects FinCEN’s previous announcement on payroll tax evasion and workers’ compensation fraud in the construction sector – an initiative also coordinated in cooperation with IRS CI. The IRS CI is quickly establishing itself as one of the primary mitigators against corporate financial fraud, playing an instrumental role in these investigations.
This recent alert and ongoing actions to prevent ERC fraud represent a wider response to illicit activities that have exploited financial systems during the COVID-19 pandemic. As legal professionals dealing first-hand with corporate law and finance, it is imperative to stay informed and adapt quickly to these evolving regulatory landscapes.
Working proactively with the latest alerts and information can ensure that institutions comply with changes, prevent regulatory breaches, and preserve the integrity of financial systems. Therefore, staying informed about these legal updates is not just theoretically interesting, but it also carries a high practical significance.