The IRS recently issued its seventh warning against questionable ERC activity. The IRS, with its…
IRS Investigating Employee Retention Credit (ERC) claims
The IRS continues to warn businesses not to fall for aggressive marketing or scams related to the ERC. Businesses should first check with their trusted tax professional before submitting an ERC claim.
As part of a larger effort to protect small businesses and organizations from scams, the Internal Revenue Service created a special withdrawal process to help those who filed an Employee Retention Credit (ERC) claim and are concerned about its accuracy. This new withdrawal option allows certain employers who filed an ERC claim but have not yet received a refund to withdraw their submission and avoid future repayment, interest, and penalties. Employers that submitted an ERC claim that’s still being processed can withdraw their claim and avoid the possibility of getting a refund for which they’re ineligible.
The new withdrawal process follows the Sept. 14 announcement of an immediate moratorium on processing new ERC claims. The moratorium, which will last until at least the end of this year, follows concerns about ineligible ERC claims.
To date, IRS Criminal Investigation (CI) has uncovered suspected pandemic fraud totaling more than $8 billion. As of Sept. 30, 2023, IRS-CI has initiated 301 investigations involving over $3.4 billion of potentially fraudulent ERC claims. Of those, 15 of the 301 investigations have resulted in federal charges. Of the 15 federally charged cases, so far, eight matters have resulted in convictions; four of those cases have reached the sentencing phase, with the average sentence being 21 months.
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