Employee Retention Credit Claims Update

On September 14^th the IRS announced an immediate moratorium through the end of the year on the processing of new Employee Retention Credit (ERC) Claims. This action was taken in response to growing concerns inside the tax agency, as well as concerns from tax professionals and media reports that a substantial share of new claims through the ERC program are ineligible for the credit. The agency is concerned that aggressive promoters and marketers are putting businesses at increased financial risk by pressuring them to file dubious or even fraudulent ERC claims.

The IRS will continue to process ERC claims received prior to the moratorium but reiterated that processing of claims will take longer due to increased fraud concerns. Payouts of these claims will continue, but at a slower pace because of the agency’s increased focus on review of these claims for compliance concerns, including intensifying audit work on those claims along with criminal investigations into promotors and businesses filing dubious claims.

The IRS is developing new initiatives to help businesses who find themselves victims of aggressive promotors. The IRS is finalizing details for a special withdrawal option for those who have filed an ERC claim but the claim has not been processed. In addition, the IRS is developing a new settlement repayment program for businesses who have received an improper ERC payment.

For those considering a claim, the IRS encourages taxpayers to contact a trusted tax professional regarding their eligibility for a claim, not a tax promoter or marketing firm looking to make money generating applications that charge a big chunk for the ERC claim. The eligibility requirements are detailed and complex and require an in-depth knowledge of the rules.

If you believe you may qualify for the credit or you are questioning the validity of a claim you already filed, we encourage you to contact your HM&M representative who can assist in the evaluation of whether, in fact, you do qualify for the credit.

Related Posts

The Tax Court Likes Hockey

Usually, the income tax deduction for meals and entertainment is equal to half the amounts spent for meals and entertainment.  There are some exceptions, one of which is where the meals are a de minimis ...

September 6, 2017 read more...

POOF! $64 Million Charitable Contribution Deduction Disappears

Alright, the facts in the case are a bit more complex than a “poof.”  But it got your attention for my at-least-annual reminder to obtain a contemporaneous written acknowledgment (“CWA”) from the donee for any ...

February 10, 2017 read more...

When in Doubt, Fill it Out

Some of the most draconian financial penalties levied by the U.S. Treasury are associated with the Foreign Bank and Financial Accounts Report (“FBAR”).  This report is made on FinCEN Form 114 by U.S. persons having ...

July 28, 2016 read more...

Offset Nursing Home Costs with Possible Tax Breaks

Abstract:   When a parent enters a nursing home, taxes are probably the last thing on anyone’s mind. But it’s important to know that several tax breaks may be available to help offset some of the ...

October 24, 2023 read more...