Trying To Help Family Member Decide If They Really Need A Tax Attorney.

I apologize for being a third party here. The family member in question is not familiar with communities like this nor do they use computers often.

To summarize who we are dealing with, the person in question (64F) is the husband of a contractor (62M), and helps manage the financial side of the business for him, as he is even less finance\tax\tech inclined than she is. (She manages everything through an accountant at tax time). To further note, the business's revenue is under $80,000 yearly. I'm repeating what follows as it was explained to me, the OP.

So in 2020 the person in question went to their accountant to get the 3rd quarterly done for the year, and their accountant said that the IRS was giving small businesses a credit for the business staying open and as long as you had one employee and the company had a decrease in income, which they did, and they would qualify for the credit. My research showed this was probably something to do with EIDL or ERC.

They also got a credit for the Q4 2020 and I believe the 1 and 2nd quarters in 21'. But it seems they don't have an issue with 2021 filings. Flash forward to May 2024, They received a notice from the IRS, stating that they had to pay back the credit given for the 3rd and 4th quarters of 2020 in the amount of $10k plus, they said they would have to look through my paperwork for the exact amount. They said they are very diligent with all of their tax obligations, and pay what they owe for the last 13 yrs, all filed through a CPA.

They have repeatedly provided any forms the IRS asks for, mailed certified, and they seem to not get them, and ask for them again. They been dealing with a woman at the IRS, and she hasn't helped at all. She says she calls them and they don't return her calls, which is allegedly untrue. Now, they received a letter several days ago, stating; on the 17th of February, they would put a levy on the business accounts and anything else that was in the name of the business. Thankfully for them, apparently, they don't have anything else in the business name aside for a little bit of cash and the little bit of equipment needed.

The next day they looked at my accounts online, and the IRS had initiated the levy, before the time it stated in the notice. they called their IRS contact, and asked her what they needed to do to fix this, and she came up with some more issues with 941's from 2019, 2022, and 2024. They went straight to their accountant and spent 4 hours with him getting all the documentation the IRS said they needed and hand delivered it to her office, not her personally, first thing this morning.

10 minutes after they left, the IRS contact called, and said she said she was told they had brought the paperwork and she that she would contact my bank and lift the levy, 5 minutes later, they checked online, and the levy was gone. That's about it all in a nutshell. Their accountant claims they were qualified, but every time they ask their IRS contact why the IRS says they aren't qualified, she states that she can't tell them, because she's not an auditor, but her name is on the bottom of every single notice they are sent.

Two questions, because I know this is a long post.

1. Is this something they should be worried about? Or is this just the IRS digging into businesses because of all the EIDL and ERC fraud that has gone on?
2. Do they really need to spring for a tax lawyer? They aren't on very strong financial footing, the lawyer would be a burden, but if it's lawyer time, than so be it.

Thank you for your time in reading this.

TLDR; Family member's accountant filed for tax credit for their business from the IRS in 2020, who is now demanding repayment, even though they allegedly qualified for it.