IRS Announces Employee Retention Credit Moratorium
Audio version available here:
Length: approx. 1 min. 30 sec.
During the COVID-19 pandemic, the Employee Retention Credit (ERC) provided much-needed tax relief to businesses suspended or experiencing a decline in receipts while keeping their employees on payroll. Unfortunately, this credit has seen an unprecedented rise in invalid claims promoted by scammers taking advantage of primarily small businesses.
Despite an original deadline in 2021, nearly 600,000 new claims have been submitted in the last 90 days. This has pushed the IRS to enact a processing moratorium of new claims effective immediately. This moratorium is expected to last through at least the end of 2023. As the IRS finds that many newer claims are from businesses attempting to receive a tax credit they are not entitled to, fraud investigations are increasing, and they could last more than 180 days. Thus, businesses who recently applied for the credit are encouraged to withdraw their unpaid claims.
The IRS also reminds businesses to not fall victim to false promoters of the ERC by working only with vetted tax professionals. Your tax professional should be focused on minimizing your tax burden through completely legal means, and that is precisely what we dedicate ourselves to at XQ CPA. If you are feeling confused or concerned about this ERC moratorium and need the right guidance, please don't hesitate to reach out to us. We're just a click or phone call away!
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