As of September 14, 2023, the IRS has stopped processing newly filed Employee Retention Credit (ERC) claims, at least until the end of 2023. This means the IRS will not take action at the present time on any claims filed on or after this date. While they will continue to process previously filed ERC claims, taxpayers can expect the time to do so to be longer and for their claims to undergo even more scrutiny than what we witnessed at the beginning of the program in March 2020.
This moratorium by the IRS is a significant action and is due to the growing belief that many of claims being filed at this point are either erroneous or fraudulent. The announcement comes as no surprise; however, as the IRS has made multiple announcements regarding ERC scams and questionable claims, and recently issued guidance on the supply chain disruptions’ impact on credit eligibility.
As the ERC is an area many business owners continue to inquire about, regarding both new submissions and previous, below are the important takeaways from this latest development:
- Newly filed ERC claims will not be processed currently, at least through the end of this year.
- Previously filed ERC claims not yet processed will continue to be processed but the length of time to hear back is likely 180 days or more; all claims will likely face additional scrutiny as well.
- The IRS anticipates releasing details soon for taxpayers regarding:
- Withdrawing previously filed claims that have not yet been paid, and
- Repaying previously received ERC refunds, in cases where a taxpayer has determined they filed an erroneous claim, through a settlement program to avoid penalties.
The ERC has been an impactful credit for businesses throughout the pandemic and beyond. For those with a claim currently in motion, work closely with your tax advisers to determine the best course of action moving forward.
Contact Robert Venables at firstname.lastname@example.org or a member of your service team to discuss this topic further.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.