A promoter who skips due diligence pays $1,000 for each failure
What the document says“Any COVID-ERTC promoter which provides aid, assistance, or advice with respect to any COVID-ERTC document and which fails to comply with due diligence requirements imposed by the Secretary with respect to determining eligibility for, or the amount of, any credit or advance payment of a credit under section 3134 of the Internal Revenue Code of 1986, shall pay a penalty of $1,000 for each such failure.”
The section requires a COVID-ERTC promoter helping with a COVID-ERTC document that fails the Secretary's due diligence requirements on eligibility for or the amount of a credit under section 3134 of the Internal Revenue Code of 1986 to pay $1,000 for each failure. Those requirements are to be similar to those under section 6695(g), the penalty reaches only documents that are or relate to a return or claim for refund, and it is treated as imposed under section 6695(g) and assessed under section 6201.
What the document actually says“Any COVID-ERTC promoter which provides aid, assistance, or advice with respect to any COVID-ERTC document and which fails to comply with due diligence requirements imposed by the Secretary with respect to determining eligibility for, or the amount of, any credit or advance payment of a credit under section 3134 of the Internal Revenue Code of 1986, shall pay a penalty of $1,000 for each such failure.”
A promoter who helps with such a paper must take due care. Falling short costs $1,000 each time.
Due care means checking that the claim holds up. The Secretary sets what that means. The fine bites only on returns and refund claims.
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