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If you claimed the Employee Retention Credit, you already did the hard part. Now comes the part nobody wants to think about: what happens if the IRS asks questions later?
ERC may be “done,” but the IRS can still review eligible quarters for years, and audits don’t require fraud to be stressful. Many are routine, but they can still require attorney-level responses and incur significant legal fees. Harbor Shield transfers that risk into a fixed, predictable protection plan by covering up to $50,000 per occurrence in legal defense costs.
Many business owners assume that a refund received means the risk is over.
In reality, ERC scrutiny can extend through 2030, depending on the quarter and statute rules, which means your filing can be questioned long after you’ve moved on.
So the real question becomes: Do you have a plan for the cost of defense if an IRS notice appears?
The IRS is sitting on a large backlog of ERC claims, and many of those claims accrue interest while they wait to be processed. The longer that backlog lingers, the more approved claims can cost the government. At the same time, the IRS is responsible for protecting taxpayer dollars and making sure credits like ERC were claimed correctly.
Taken together, it is reasonable to expect a shift in tactics: instead of slowly reviewing every claim up front, the IRS can approve and pay more claims now, carefully track who received what, and then use audits later to challenge filings that look questionable. Signals like proposed clawback language in legislation, investments in electronic payments and the scrutiny ERC has already received all point in this direction.
That does not mean the IRS is acting in bad faith. It means the agency is doing its job: enforcing tax rules and safeguarding funds after they go out the door. For business owners, though, it creates a long “quiet period” where everything seems fine, until a notice shows up asking you to prove a credit you already used. That is why the best time to get audit-ready is before any letter arrives.
Harbor Shield ERC coverage is pre-notice only: you have to enroll before the IRS posts a CP notice or an “open inquiry” indicator for that ERC quarter. Once that appears, new coverage can’t be added for that quarter.
CP notices are often the IRS saying “we have a question,” and for ERC, they can be the first step on the audit path.
That’s why Harbor Shield is designed for the “quiet period” before anything hits.
Harbor Shield ERC is a contractual guarantee (not insurance).
You choose which ERC quarters to protect, and if an audit event happens for a covered quarter, Harbor Shield reimburses covered legal defense costs up to $50,000 per occurrence.
Harbor Shield follows a simple sequence:
Before activation, Harbor Shield runs a transcript scan to confirm no active audits, then countersigns and activates after payment and verification.
Daily IRS transcript monitoring is handled by Anchor Accounting Services and priced at $4 per month, per client, helping spot inquiries before mail arrives.
If a transcript shows an audit code or you receive a CP notice, Harbor Shield connects you with an approved tax firm and activates a defense for that quarter (if you enrolled before the notice was issued).
Attorneys invoice you directly; Harbor Shield reimburses covered invoices up to the $50K guarantee.
Coverage stays active as long as a few basics are maintained:
✅ Keep monitoring active
Maintain the required forms to keep monitoring in place.
✅ Submit IRS notices within five business days Late submission can result in coverage being terminated.
✅ Keep ERC documentation intact
Store worksheets and supporting files for covered quarters.
✅ Use an approved Harbor Shield tax firm
Outside counsel = no reimbursement.
It’s an ERC audit defense coverage tied to a covered filing, designed to fund and coordinate an attorney-led defense, not to replace your CPA or serve as general tax resolution.
Not for that quarter. Once a CP notice or “open inquiry” is on your transcript for that ERC filing, new coverage can’t be added for that quarter.
Yes. Harbor Shield connects you with vetted tax attorneys, and you retain them directly (privilege preserved).
Up to $50,000 per occurrence in legal defense costs for covered matters.
Disclaimer: Harbor Shield provides contractual audit defense coverage and does not provide tax advice or tax preparation services. Clients retain independent legal counsel directly; Harbor Shield reimburses covered legal defense costs up to stated limits when program requirements are met.
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