In the news recently, the IRS announced a moratorium that will last at least through December 31, 2023, on reviewing & processing Employee Retention Credit (ERC) claims due to a significant number of dubious claims filed by marketing promoters and illicit preparers. During this moratorium, the IRS is working to help innocent businesses and taxpayers who may have been caught up in these scams. The IRS emphasized that anyone who improperly claims the ERC would have to pay it back, possibly with penalties and interest.
The IRS has now announced an ERC withdrawal procedure for businesses who may be concerned that their ERC claim may be wrong.
Businesses may withdraw a filed ERC claim if they meet the following qualifications:
- The claim was filed on an amended Form 941-X, 943-X, 944-X, CT-1X.
- The amendment only claimed an ERC and no other adjustments.
- They would like to withdraw the entire amount of their claim.
- The IRS has not paid the claim, or the business may have received a check but has not yet cashed it.
The withdrawal process offers a way for employers who doubt the ERC calculation’s accuracy to withdraw the claim to avoid possible repayment, interest, and penalty issues. Claims that are withdrawn are treated as if they were never filed.
It is highly recommended to have the ERC claim reviewed by a trusted tax professional to ensure its accuracy. If you would like more information about the IRS ERC withdrawal process, please refer to Fact Sheet 2023-24 https://www.irs.gov/newsroom/help-for-businesses-steps-for-withdrawing-an-employee-retention-credit-claim.
Please contact your Wegner CPAs tax advisor for assistance if you have questions, need guidance on a previously filed ERC claim, or need assistance filing an ERC refund claim if you are eligible.