IRS Halts Employee Retention Credit Processing

On Thursday, 9/14, IRS Commissioner Danny Werfel ordered the agency to stop processing new claims for the pandemic-era small business tax break in order to protect filers from a “surge of questionable claims.” The Employee Retention Credit (ERC) program has provided refundable tax credits to businesses and tax-exempt organizations that were affected during the COVID-19 pandemic. As time has passed, the number of shady organizations marketing the ERC program to businesses that may not qualify for the credit has increased.

Here are a few details about the ERC program’s pause:

• The ERC program is not expected to take new claims until at least the beginning of 2024
• Processing times for existing claims could be delayed from the standard goal of 90 days to 180 days or longer.
• Taxpayers still considering ERC claims are encouraged to review program guidelines and work with trusted tax professionals.

“The IRS is increasingly alarmed about honest small business owners being scammed by unscrupulous actors,” says Werfel. The IRS advises businesses interested in the ERC to take a step back and talk to a trusted tax professional, as opposed to a promoter looking to take home a piece of their refund. If you want to know if your business should file a claim when the IRS starts accepting them again, contact us.

Learn more about ERC scams here.