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The Future of ERC Audits: AI Enters the Arena

The IRS is taking a monumental leap into the future of auditing Employee Retention Credit (ERC) claims with the introduction of artificial intelligence (AI). This innovative approach, as shared by former IRS deputy commissioner Darren Guillot, aims to pinpoint potentially fraudulent claims with unprecedented precision. The focus will be on the crucial criteria for ERC eligibility, including significant declines in gross receipts and the impact of government shutdown orders.


A notable instance involves the nuanced interpretation of partial shutdowns, exemplified by restaurants limited to half their seating capacity. This scenario underscores the complex nature of qualifying for ERC, hinging on the stringent criteria set by the IRS.


The advent of AI in auditing signals a new era for businesses navigating the ERC landscape. With technology now capable of cross-referencing zip codes against local government orders, accuracy in claim validation has reached a new height. Moreover, the extended statute of limitations for ERC claim audits amplifies the importance of ensuring compliance.


For businesses seeking guidance or reassessment of their ERC claims, Verity CPA stands at the forefront of tax expertise and technological adaptation. To explore how this new development impacts your business and to ensure your claims withstand scrutiny, connect with us at 808.546.5026 or



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