On September 14, 2023, the Internal Revenue Service (IRS) issued two press releases cautioning taxpayers about unscrupulous promoters of the Employee Retention Credit (ERC).1 The first release indicates that the IRS will no longer process new claims for the ERC until at least December 31, 2023. This measure is being taken to protect business owners from filing ineligible claims and being required to pay back the benefits, without fully understanding the program or consequences of filing an ineligible claim. After finding that many claims did not qualify for the credit, the IRS has taken a more cautious approach in reviewing credit applications. In doing so, the IRS has found that many small businesses have been scammed by unscrupulous promoters.
The warning about “aggressive marketing by nefarious actors” is the subject of the second press release. The release warns taxpayers that improperly filed and paid claims may result in criminal investigation and the requirement to pay back the credit as well as being fined penalties and interest. The IRS is advising taxpayers that wish to claim the credit to do so by working with a trusted tax professional.
If you have questions or concerns about the eligibility of an active or potential ERC claim, please reach out today to one of the Ryan professionals listed below to vet your claim or fact pattern.
1 IR-2023-169; IR-2023-170.
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