On September 14, 2023, the IRS issued a news release stating that effective immediately it will halt reviewing and approving Employee Retention Credit claims.
The IRS is concerned about fraudulent claims and aggressive marketers who persuade clients to file for credit when they are not eligible. They have found that 95% of the claims submitted on a typical day were not eligible for the credit. They are setting up a procedure to address the fraudulent marketers while, at the same time, assisting taxpayers who have been defrauded by their schemes.
What should you do if you are about to file for the ERC or have already filed for an Employee Retention Credit?
We recommend to our clients that if they are eligible, they should still claim the ERC. The only thing that is changing is that there is a longer wait time to obtain refunds.
If you have already filed the ERC claim with the IRS, there are two options available to you:
- If you are concerned that the claim is incorrect, review the information with a trusted tax professional. If you have not yet filed a claim, please review the information you have with a trusted tax professional. They will compare the information you have to the rules set out by the IRS regarding eligibility and the calculation of the credit.
- If you believe the claim is correct as submitted, then all you need to do is wait. The IRS has said the moratorium is expected to end by the end of the year and they will resume the reviewing of ERC claims.