The IRS has published several news releases over the past couple of weeks, summarizing its review of Employee Retention Credit (ERC) claims.
Moratorium Update
On August 8th, the IRS announced in IR-2024-203 that it will begin processing claims previously held up by the moratorium. Claims received between September 14, 2023 and January 31, 2024 will now be processed with a focus on the highest and lowest risk claims. During review, Taxpayers may experience that some quarters will be paid as valid, while others remain under review.
Additionally, the IRS announced that it has identified 50,000 valid ERC claims and is moving them into the pipeline for payments, which are expected to begin in September.
VDP and Claim Withdrawal
Additionally, the IRS announced in IR-2024-213 on August 15th that it will reopen the voluntary disclosure program (VDP) through November 22, 2024. The VDP program is only available for improper 2021 claims which have been paid. Approved Taxpayers will repay claims at a 15% discount and avoid penalties and interest.
Taxpayers may still pursue the claim withdrawal process for any ERC claim that has not yet been paid.
Reverse or Recapture of Improper Claims
In a separate news release, IR 2024-212, the IRS announced it plans to mail up to 30,000 new letters to reverse or recapture potentially more than $1 billion in improper ERC claims. Thousands of letters have already been mailed with more mailings on additional questionable payments continuing into the fall.
CTI’s Take
The IRS is continuing to apply heightened scrutiny to ERC claims. If you receive a notice or letter regarding claims filed, it is imperative that you respond timely to preserve the right to a refund. If you have questions or concerns regarding your ERC claims, reach out to one of our tax specialists for assistance.
