Business owners should be prepared for their ERC claim to be processed by the IRS soon. In recent years, the IRS has faced intense scrutiny for their slow work on processing Employee Retention Credit claims made by businesses owners during the pandemic. After enacting a moratorium on new claims processing following a wave of fraudulent claims, its progress slowed significantly. Business owners who have filed a genuine ERC claim have waited months or even years for it to be processed, and now may be that time.
Ever since the moratorium was enacted in 2023, the IRS has faced criticism over abandoning business owners with legitimate claims to the Employee Retention Credit. There have been periods where the IRS resumed work on claims processing, but mostly to reject improper claims, and to give opportunities for businesses to withdraw their claim or pay back the credit they already received through initiatives like the Voluntary Disclosure Program.
However, just recently, the IRS announced it has undertaken the processing of 400,000 ERC claims worth about $10 billion. The number includes both eligible and ineligible claims, but the IRS says that a “vast majority…[are] being processed for approval”. This means that within the next few weeks or months ahead, your pending ERC claim could finally be processed and paid out.
While this is great news for business owners who have unfairly waited months or even years for their claim to be processed, it is not a guarantee your claim is included within the 400,000 in progress. And unfortunately, it is possible the IRS could reject the claim if it is high-risk. If you would prefer to withdraw your claim before the IRS gets to it, the Withdrawal Program is still open. If you have already received an ERC payment and have since realized you did not properly qualify for the credit, the Voluntary Disclosure Program is open through November 22nd to safely repay the credit at a discount.
Information surrounding the Employee Retention Credit can be confusing, and malicious promoters still linger and target business owners like you. For the right guidance regarding the ERC, reach out to XQ CPA’s tax professionals. Give us a call or talk to us at the link below.
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