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Innovation Refunds

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ERC
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The profile

A Des Moines-area Employee Retention Credit firm that took 25 percent of its clients' refunds, advertised with Modern Family's Ty Burrell, sold through community banks that shared in the commissions, and by its own count processed more than $4 billion in claims before the IRS froze new ones in September 2023. It then laid off more than 40 percent of its staff.

Identity and role

Innovation Refunds, LLC is based in the Des Moines, Iowa area. Its Form D, filed with the SEC on September 13, 2023, gives 2021 as its year of formation and lists Howard Makler as chief executive and a director. In August 2022 it described itself as "an industry leader in turnkey tax solutions co-owned by over 100 banks."

Innovation Refunds did not sign the returns. According to documents CNBC reviewed, Innovation Refunds "doesn't sign off on the returns submitted to the agency — the independent tax partners and small businesses do." It told NBC News it "is not a tax preparer."

Pandemic-relief role

The Employee Retention Credit paid employers a refundable payroll-tax credit, claimed after the fact on amended returns. Innovation Refunds found the employers, gathered their documents, routed the claims to outside tax professionals, and took "a 25 percent fee of the credit claimed for its work, after a business is paid by the IRS," CNBC reported.

The marketing ran on television during major sporting events, on CNBC, on radio and on social media, and many ads featured Makler and Ty Burrell of ABC's "Modern Family." Some said businesses could qualify "in as little as eight minutes." Its website told readers that "the IRS expects 70-80% of SMBs are good candidates for taking the ERC"; the IRS told CNBC it "has not published estimates of the percentage of taxpayers expected to qualify."

Banks were a distribution channel. By November 2022 the firm said it had "empowered more than 60 community banks" to send clients its way, and Colony Bankcorp's third-quarter 2024 report attributed part of a decline in its noninterest income to "a decline in commissions received from our partnership with Innovation Refunds related to the Employee Retention Credit."

The company's own totals grew with the market. In August 2022 it said it had helped businesses claim "more than $1 billion in refunds since March 2020." Through May 2023, it told CNBC, it had processed more than $4 billion in ERC claims; a former executive vice president, Rob Domenico, put the figure at nearly $7 billion. Those are the company's and a former executive's numbers, not audited ones.

After the moratorium

CNBC interviewed 20 former employees and contractors, many of whom described an aggressive sales culture; five spoke well of the company. An internal email offered a $100,000 bonus to every employee hired by March 31, 2023 if the company closed 50,000 lifetime deals. "Shortly after the IRS moratorium in September, Innovation Refunds abruptly laid off more than 40% of its staff and paused advertising, according to an internal memo CNBC reviewed."

One client's case, reported by NBC News in April 2024: a Missouri business owner received $13,000, paid Innovation Refunds 25 percent, and later had to repay the credit because she did not qualify. The company told NBC that independent tax professionals make eligibility calls and that it refunds its fee if the IRS disagrees with a determination it made. NBC also reported, citing OpenSecrets, that Innovation Refunds spent $720,000 lobbying Congress in 2023.

No government enforcement action against Innovation Refunds appears in the records we reviewed.

Where they are now (2025–2026)

The company's leadership page lists Makler as chief executive.

Sources

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