"Only 2.9%" — Shark Tank investor Kevin O'Leary shares concerns over IRS audit provisions targeting small businesses

Shark Tank investor Kevin O’Leary recently addressed audit-related language in a federal bill that could impact millions of small businesses that participated in the Employee Retention Credit (ERC) program.

In a clip from his Fox Business interview with host Stuart Varney, posted on his Instagram on May 24, 2025, O’Leary was asked whether he supported the bill in its current form. He responded with hesitation, citing a specific provision that would allow the IRS to audit ERC recipients for up to nine years.

“The tonality is that was a fraudulent program. The facts are it's not true. Only 2.9% admitted by the IRS themselves were ever fraudulent. That's less than most government programs,” the Shark Tank investor said.

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Shark Tank investor Kevin O’Leary warns the IRS audit rule could harm small businesses long-term

Extended audits could hinder small businesses

Kevin O’Leary said his perspective on the legislation is shaped by the needs of small businesses, which he defines as those employing between five and 500 people.

“I look through the lens of small business, which is 62% of job creation,” he stated during the interview.

He warned that long-term audit exposure could make it difficult for these businesses to access capital. O’Leary explained that the current bill language would subject millions of small businesses that used the program to audits for up to "nine years."

He noted that this extended review period could prevent businesses from securing funding, as lenders and investors might hesitate to engage with companies under prolonged IRS scrutiny. In his view, the IRS already has sufficient authority to pursue fraud cases without additional provisions.

“The fact is, if you committed fraud in any scenario, there is no statute of limitations. The IRS already has the power to go audit you forever,” he said.

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IRS data cited to challenge fraud claims

A central part of O’Leary’s argument is based on official figures from the IRS. The Shark Tank investor pointed out that the provision would expose millions of ERC recipients to audits, saying:

“But this language says that anybody that took it, which are millions of small businesses, are going to be open for audit for nine years which is ludicrous because they won't be able to raise any money.”

According to Kevin, this figure indicates that the majority of ERC participants acted in compliance. He argued that the ERC was a necessary and effective tool to support small businesses during economic uncertainty.

“There are millions of companies, millions, that [the ERC] kept alive...The ERC program was very functional keeping companies alive,” O’Leary stated.

Despite that, he said that the current legislative language misrepresents the nature of the program and its users. Kevin also suggested that legislative overreach could discourage entrepreneurship.

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O’Leary continues pushing for changes on Capitol Hill

Having helped many companies secure ERC funding, O’Leary said he is continuing his advocacy efforts.

“I was one of the people that got it for all of my companies. I worked hard to get it for thousands of others...It kept our people employed,” he explained.

The Shark Tank investor is now bringing his concerns directly to lawmakers, saying:

“I’m going to the Senate and I’m showing this to senators, and they’re outraged too....It's an outrage."

According to O'Leary, the IRS does not require new powers to investigate fraud, and this provision introduces an unnecessary burden.

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