I-9 errors affect mergers and acquisitions in ways many organizations don’t anticipate until due diligence begins. Workforce authorization compliance has become a central component of risk evaluation for buyers, private equity firms, lenders, and internal audit teams. Missing I-9s, incorrect forms, document mismatches, and improper remote verification are no longer “HR housekeeping”—they are deal-impacting liabilities.
The impact is so significant that M&A attorneys and corporate immigration experts now treat I-9 compliance as a core diligence category. In a recent conversation between i9 Intelligence CEO Jed Butler and Morgan Lewis immigration attorney Eric Bord, the growing centrality of I-9 compliance in transactions became unmistakable.
To understand why this matters, and how I-9 gaps influence valuations, timelines, and post-closing risks, we break down the errors most commonly discovered during M&A and corporate audits—and how employers can reduce exposure before a transaction.
During any acquisition, the buyer assumes the workforce-related liabilities of the acquired entity unless negotiated otherwise. That means historical I-9 violations—missing forms, incorrect reverifications, document issues, or the absence of required audit trails—can materially affect:
I-9 errors often reveal deeper structural concerns about onboarding consistency, internal controls, HR documentation management, and regulatory readiness.
Even banks and financing partners increasingly require I-9 audit validation before funding M&A transactions.
M&A legal teams, external auditors, and immigration specialists regularly uncover patterns such as:
Payroll-to-I-9 mismatches remain one of the most damaging findings. As attorney Eric Bord shared in his conversation with Jed Butler, missing I-9s can be serious enough to cause deals to collapse.
Using a retired I-9 form—even unintentionally—is a technical violation that can multiply quickly across a workforce.
These issues include:
Companies that attempted remote verification outside DHS rules or used inconsistent workflows across locations will face remediation demands.
Common for employees with temporary work authorization and high-turnover industries.
Multiple forms for the same employee with mismatched data create significant risk flags for buyers and auditors.
One of the biggest M&A pitfalls today: electronic I-9 PDFs provided by the seller without any audit trail. As Bord explained: “When a buyer receives pristine PDFs but no audit trail, they essentially don’t have valid I-9s.”
Penalties run up to $28,619 per violation, depending on the type and severity.
Related: I-9 Penalties 2025.
Due diligence may pause or fall apart entirely if workforce documentation is unreliable.
Buyers may require significant concessions based on perceived risk.
Correcting I-9 issues after acquisition is expensive, time-consuming, and operationally disruptive.
Missing, inconsistent, or undocumented I-9s signal regulatory vulnerability.
This growing impact was a major theme in Jed Butler’s discussion with attorney Eric Bord. Jed summarized it this way:
“What struck me most when speaking with Eric was just how often I-9 compliance is now determining the outcome of deals. We’re not talking about small oversight issues—some companies are seeing transactions delayed, devalued, or even fall apart entirely because their I-9s weren’t in order. In today’s environment, compliance isn’t a back-office function anymore. It’s a deal readiness requirement.” — Jed Butler, CEO, i9 Intelligence
This aligns with what venture capital firms, private equity funds, and lenders increasingly demand: documented, auditable I-9 compliance before capital changes hands.
Investors and audit committees evaluate I-9 compliance as part of operational maturity. They look for:
I-9 issues can materially affect:
Internal auditors, compliance teams, and external reviewers often find:
These findings frequently lead executives to commission a full third-party I-9 audit prior to regulatory scrutiny, diligence, or SOX/IPO readiness.
Useful as a starting point, but internal teams often lack time and expertise.
Automation reduces human error and standardizes document review.
This is now standard practice in M&A because it provides:
Discover our I-9 Audit capabilities and how we can support your audit process.
The best time to evaluate I-9 risk is:
I-9 errors affect mergers, acquisitions, and corporate audits more than ever before. Deals are slowing down, values are being adjusted, and some transactions are failing entirely due to undocumented or incomplete I-9 programs.
A structured third-party audit ensures:
Schedule a free consultation and see how an I-9 audit can strengthen your compliance program.
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