MORATORIUM ORDERED ON NEW ERC CLAIMS
Blanchard, Ganier & Associates CPAs APC
Providing personalized accounting services, tax planning and financial consulting for individuals and businesses.
The IRS has issued an immediate moratorium on the processing of new ERC claims due to what they call a “surge of questionable claims.”
In an official press release Thursday, IRS Commissioner Danny Werfel ordered the moratorium, effective immediately, following growing concerns inside the agency, as well as from tax professionals and news reports, that a significant number of new claims are not only ineligible, but illegitimate-thanks to a significant up-tick in ERC scams. The moratorium is expected to last at least to the end of the year in an effort to prevent further financial abuse and exploitation to businesses.
In the release, Commissioner Werfel said, “The IRS is increasingly alarmed about honest small business owners being scammed by unscrupulous actors, and we could no longer tolerate growing evidence of questionable claims pouring in.”
ERC, short for Employee Retention Tax Credit, is a legitimate pandemic-era tax credit/refund for business owners, but over time, the program has become a significant target of aggressive marketing and so-called ERC mills, to businesses that may not qualify for the credit.?
The IRS will continue to process ERC claims received prior to the stop order; however, processing times will take longer, possibly 180 days or longer for claims requiring more scrutiny. In fact, according to the agency, thousands of claims have been referred for audit and hundreds of criminal cases are being investigated.
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Taxpayers who are still considering filing an ERC claim should consider carefully reviewing the guidelines and WAIT. The IRS suggests seeking out advice from a trusted tax professional, like a CPA who understands the complex ERC rules, which was also noted in an article previously published by Blanchard, Ganier & Associates CPAs APC. The IRS is rolling out new initiatives for those who've already fallen victim to ERC scams, such as a settlement program for repayments, which the agency claims it will detail this fall.
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