IRS Drowning in 20,000 ERC Claims Weekly – Is Your Claim Legitimate?

The Employee Retention Credit (ERC) was a lifeline for many businesses during the pandemic. However, the program has since become a breeding ground for fraudulent claims, putting a significant strain on the IRS's resources and the public's trust in the tax system.

As Commissioner Werfel pointed out, the IRS is still receiving an astounding 20,000 ERC applications weekly, despite a moratorium on processing new claims. This influx highlights the persistent allure of the credit, even for those who may not be eligible. It also underscores the urgent need for stronger enforcement measures to protect both the government's financial interests and the legitimate claimants who deserve timely assistance.

The Tax Relief for American Families and Workers Act of 2024, currently stalled in the Senate, offers a promising solution. Its provisions, such as the retroactive bar on additional claims, extended statute of limitations, and increased penalties for promoters, would equip the IRS with the tools it needs to crack down on fraud more effectively.

However, it's crucial to remember that not all ERC claims are fraudulent. Many businesses rightfully qualify for the credit and are eagerly awaiting their rightful share. The challenge lies in distinguishing these legitimate claims from the bogus ones, a task akin to finding a needle in a haystack, as Commissioner Werfel aptly described it.

This is where the tax bill's value truly shines. By strengthening enforcement, it not only curbs fraud but also streamlines the processing of legitimate claims. With fewer fraudulent applications clogging the system, the IRS can focus on identifying and issuing payments to those who genuinely deserve them.

The passage of this bill is therefore not just a matter of financial prudence; it's a matter of fairness and efficiency. It's about ensuring that taxpayers' money is used responsibly and that those who played by the rules receive the support they were promised.

In addition to the ERC issue, it's heartening to hear Commissioner Werfel's optimism about the IRS's technology modernization efforts. The impending upgrade of the individual return processing system is a welcome development, promising faster refunds, more real-time information, and an overall improved taxpayer experience.

As industry leaders, we have a responsibility to stay informed about these developments and advocate for policies that uphold the integrity of our tax system. We must support measures that deter fraud, protect legitimate claimants, and enhance the efficiency of IRS operations.

The ERC conundrum is a complex issue with no easy answers. But by working together, we can find a balanced approach that upholds the spirit of the program while safeguarding against abuse.

Concerned about your ERC claim??Check out our ERC updates page for up-to-date insights into the ERC and its implications for your business.

As the founder of MTRS, I'm committed to sharing insights on the evolving business landscape. While my expertise provides valuable information, it's not intended as formal financial advice. For personalized guidance, consult with qualified financial advisors. Connect with MTRS for strategies to thrive in a changing world!

About the Author

Danielle Michel is a serial entrepreneur and venturist whose expertise spans business consulting, specialized tax solutions (MTRS), podcasting, and real estate investing. A passionate advocate for entrepreneurs, she's dedicated to empowering others with the tools and mindset to realize their business dreams. In her spare time, Danielle prioritizes health and wellness as a key foundation of her success and that of her businesses.

Danielle Michel is a serial entrepreneur and venturist whose expertise spans business consulting, specialized tax solutions at Manufacturing Tax Recovery Services , podcasting at The Upside, Downside Podcast , and real estate investing. A passionate advocate for entrepreneurs, she's dedicated to empowering others with the tools at The Suppressed Entrepreneur and mindset to realize their business dreams. In her spare time, Danielle prioritizes health and wellness as a key foundation of her success and that of her businesses.