Pandemic Darlings The pandemic economy, in original documents
Home Articles Innovation Refunds Sold Through Banks, Not Just to Businesses

Articles · Employee Retention Credit (ERC)

Reported article

Innovation Refunds Sold Through Banks, Not Just to Businesses

Innovation Refunds' 25 percent fee, its ownership structure, and its WARN Act litigation are covered elsewhere.1 The company also built a pipe to find customers: a distribution network of community banks, credit unions, and bank trade associations that referred small-business owners into Innovation Refunds' Employee Retention Credit pipeline, in exchange for money, gift cards, or nothing at all.

Pandemic Darlings · Published

In a quarterly filing, Colony Bankcorp, the Georgia parent of Colony Bank, told the SEC that its other noninterest income fell in the third quarter of 2024 for two reasons: a swing from a gain to a loss on the sale of assets, and "a decline in commissions received from our partnership with Innovation Refunds related to the Employee Retention Credit."2 That sentence is the only mention of Innovation Refunds anywhere in the filing. It gives no cumulative dollar figure, no percentage of the quarter's income, and no history of how large the commission line had been before it declined.

By later filings, the line is gone. Colony Bankcorp's 10-K for full-year 2024 breaks out noninterest income by category (service charges, mortgage fees, SBA loan sales, interchange, insurance commissions, and an "other" bucket) and attributes the year's changes to equity investment gains, wealth advisory and merchant services, and SBA servicing fees. Innovation Refunds does not appear.3 Neither the first-quarter nor the second-quarter 2025 filings mention it either.4 Whether that means the commissions stopped entirely, or simply fell below the threshold a bank bothers to explain to investors, is not disclosed either way. Either reading is consistent with a channel that peaked and then wound down after the IRS moratorium.

Colony Bank was one bank inside a larger structure. In July 2022, Innovation Refunds described itself in its own press release as "backed by BankTech Ventures and co-owned by over 100 banks."5 BankTech Ventures is a venture fund whose own homepage states its purpose: "Our banks invest in BankTech Ventures to get critical innovation and technology decision support, business impact from the companies we source and invest in, and investment return by being part of our strategic investment fund."6 In February 2023, BankTech Ventures' own site profiled Innovation Refunds under the heading "Have You Met Innovation Refunds?" and described an "Ambassador Program" that gave "tangible benefits to bank partners and their valued commercial customers, with no financial investment"; that meant banks paid nothing to refer their business customers, and readers were told to contact BankTech Ventures' own staff to set it up.7 Checked live in July 2026, BankTech Ventures' current portfolio page does not list Innovation Refunds among its roughly two dozen named holdings.8

Innovation Refunds also went through bank trade associations. In March 2023, the Community Bankers Association of Illinois circulated a partnership announcement to its member banks along with a webinar registration link.9 On September 7, 2023, one week before the IRS moratorium, the Community Bankers Association of Georgia hosted an Innovation Refunds webinar titled "De-Risking ERC," pitched to member banks around IRS scrutiny of ERC claims and "best practices to ensure the highest quality" of the credits banks' customers were filing.10 Neither association's material discloses a referral fee or a revenue share for the endorsement itself.

Credit unions got a parallel channel. On August 3, 2023, Innovation Refunds announced a partnership with InterLutions, a credit union service organization serving more than 500 member credit unions, to offer ERC eligibility screening to those credit unions' business members at no upfront cost, with eligibility work done by outside tax attorneys.11 The announcement named St. Mary's Bank Credit Union, which the release called "the first credit union in the U.S.," as an existing user of the arrangement.11 Two weeks later, on August 17, 2023, Innovation Refunds announced a separate "strategic alliance" with Native American Bank, N.A., described as the only national American Indian-owned community development bank in the country, framed around expanding ERC access for tribal nations and Alaska Native corporations.12

Core Bank, a Nebraska-based lender, posted a customer-facing page describing its "partnership with Innovation Refunds" and linking business customers to Innovation Refunds' contact page, while stating that "Core Bank is not affiliated with Innovation Refunds" and disclaiming any warranty as to the quality or accuracy of Innovation Refunds' work.13 The page also told customers that "Innovation Refunds doesn't get paid until your business gets its payment from the U.S. Treasury," and that "Innovation Refunds may require a fee for ERC claims" if approved.13

Innovation Refunds launched a formal ERC Affiliate Program in May 2023, on top of an existing "Strategic Partner Program" and "Refer and Earn" offering, paying commissions to qualifying professionals with "a strong network of small and medium-sized business clients" who sent in qualifying leads.14 According to solicitation emails CNBC reviewed, the company offered $1,000 gift cards to clients who referred other businesses that went on to file.15 Banks and credit unions were told they would pay nothing; the people generating referrals, including bank customers themselves, could be paid directly.

The executive named as the point of contact for that whole channel was Rob Domenico, Innovation Refunds' executive vice president of financial partnerships, who appeared in BankTech Ventures' own Innovation Refunds profile discussing the Ambassador Program.7 By October 2023, Domenico was the company's former executive vice president: he told CNBC the company had processed nearly $7 billion in ERC claims, a materially higher figure than the "more than $4 billion" the company itself had cited through May 2023, and said he had left in mid-September as part of a round of layoffs.15 That round, and the litigation it produced over notice given to laid-off workers, is covered elsewhere. The executive running the bank and credit-union channel exited the company in the same window as the IRS moratorium that froze new ERC applications on September 14, 2023.1

None of the public record establishes what the bank and credit-union channel was worth in aggregate, how many of the "over 100 banks" ever generated a referral, or whether BankTech Ventures ever held equity in the company it was marketing on its own website. We found no public enforcement action by DOJ, FTC, IRS, SEC, or a state attorney general against Innovation Refunds by name, for the channel or anything else; that search cannot rule out a nonpublic inquiry.1 Innovation Refunds' dedicated affiliate sign-up page now redirects to its homepage rather than resolving on its own, even as the homepage itself, checked in July and again in September 2026, tells visitors that "The IRS continues to review and pay ERC claims, and this year has seen the highest volume of payments since the moratorium began."16

Notes

  1. Innovation Refunds and the Mills, covering the company's founding, ownership, 25 percent contingency fee, the Menaugh v. IR Labs DE, LLC WARN Act/FLSA litigation (S.D. Iowa, settled 2025), and the bounded negative search for an exact-name public enforcement action against the company. ↩1 ↩2 ↩3
  2. Colony Bankcorp, Inc., Form 10-Q for the quarterly period ended Sept. 30, 2024, noninterest income discussion (verified directly, checked July 2026): "The decrease in other noninterest income for the three month period ended September 30, 2024 was primarily due to a decline in commissions received from our partnership with Innovation Refunds related to the Employee Retention Credit as well as recording a loss on the sale of assets in the third quarter of 2024 compared to a gain on the sale of assets in the third quarter of 2023." SEC EDGAR filing (original). ↩
  3. Colony Bankcorp, Inc., Form 10-K for the year ended Dec. 31, 2024, noninterest income table and discussion (verified directly, checked July 2026): no mention of Innovation Refunds or the Employee Retention Credit anywhere in the filing; the noninterest income discussion cites equity investment valuation gains, wealth advisory and merchant services, and SBA servicing fee income, offset by lower gains on asset sales. SEC EDGAR filing (original). ↩
  4. Colony Bankcorp, Inc., Forms 10-Q for the quarterly periods ended March 31, 2025 and June 30, 2025 (verified directly, checked July 2026): neither filing mentions Innovation Refunds or the Employee Retention Credit. Q1 2025 filing (original); Q2 2025 filing (original). ↩
  5. Innovation Refunds press release, "Innovation Refunds Emerges as Industry Leader With Turnkey Solutions That Result in Tax Credits and Refunds," GlobeNewswire, July 26, 2022 (original). ↩
  6. BankTech Ventures homepage (original), checked July 2026: "We Exist to Make Community Banks Better. Our banks invest in BankTech Ventures to get critical innovation and technology decision support, business impact from the companies we source and invest in, and investment returns." ↩
  7. BankTech Ventures, "Have You Met Innovation Refunds?," Feb. 14, 2023 (original): describes Innovation Refunds' "Ambassador Program," quotes Rob Domenico of Innovation Refunds, and directs interested banks to contact BankTech Ventures' own staff by email to set up the referral relationship. ↩1 ↩2
  8. BankTech Ventures portfolio page (original), checked live July 2026; Innovation Refunds is not among the named current holdings. ↩
  9. Community Bankers Association of Illinois / CBSC, member announcement dated March 2, 2023, publicizing a partnership between CBSC and Innovation Refunds and a related webinar. CBAI announcement, PDF (original). ↩
  10. Community Bankers Association of Georgia, "Innovation Refunds Presents: De-Risking ERC," webinar dated Sept. 7, 2023 (original). ↩
  11. Innovation Refunds, "Innovation Refunds Partners with InterLutions to Provide Resources to Credit Unions," Aug. 3, 2023 (original); republished at The Credit Union Connection (original). ↩1 ↩2
  12. Innovation Refunds, "Innovation Refunds Enters into Strategic Alliance with Native American Bank to Provide Resources to Alaska Native and Native American Communities," Aug. 17, 2023. ↩
  13. Core Bank, "Innovation Refunds: Have you checked your ERC eligibility?" (original) and Core Bank, "2023 Update: Employee Retention Credit and Innovation Refunds," Feb. 9, 2023 (original). ↩1 ↩2
  14. Innovation Refunds, "Innovation Refunds Launches ERC Affiliate Program to Help American Business Owners," May 10, 2023. ↩
  15. CNBC, "How Innovation Refunds cashed in on the Employee Retention Credit," Oct. 27, 2023 (original) (archived version verified directly, checked July 2026, via Wayback Machine capture dated Nov. 2, 2023). ↩1 ↩2
  16. Innovation Refunds homepage (original), checked live July 2026 and Sept. 28, 2026: "The IRS continues to review and pay ERC claims, and this year has seen the highest volume of payments since the moratorium began"; the site's /affiliates URL redirects to the homepage rather than resolving to a standalone page, checked the same date. ↩

Primary sources used in this article

Back to top