More Warning Signs of Incorrect Claims for the Employee Retention Credit

The IRS is intensifying its efforts to address incorrect Employee Retention Credit (ERC) claims, issuing five new warning signs of errors businesses should avoid.

These new signs add to a previously highlighted list of seven issues. Businesses with pending claims are urged to review their filings carefully, consult a trusted tax professional, and consider the ERC Withdrawal Program to avoid mistakes.

Those with approved claims should also re-evaluate their filings to prevent future audits, repayments, and penalties. The IRS is preparing to announce new steps to combat improper ERC claims, including reopening the Voluntary Disclosure Program and processing low-risk payments for legitimate claims. The agency is scrutinizing high-risk claims and digitizing approximately one million claims to identify errors, intending to deny tens of thousands of clearly erroneous claims.

Businesses are reminded that ERC eligibility can vary by tax period and should ensure their claims are accurate. Since last fall, the IRS has intensified its ERC compliance efforts, recovering over $2 billion. The IRS emphasizes working with knowledgeable tax professionals, especially those who initially relied on promoters.

READ THE FULL ARTICLE FROM THE IRS HERE

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