The Internal Revenue Service (IRS) is urging businesses that filed Employee Retention Tax Credit (ERTC) claims to review their qualifications for the tax break before a March 22 voluntary disclosure deadline.
The voluntary disclosure program allows businesses or nonprofits that filed a claim in error and received a payment to repay just 80 percent of the claim.
The ERTC was a lifeline to small businesses and nonprofit groups struggling to keep their employees on their payrolls during the COVID-19 pandemic. Last September, IRS Commissioner Danny Werfel ordered the agency to immediately stop processing new ERTC claims due to a "surge of questionable claims."
"Many businesses were wildly misled about the qualifications, and the IRS is taking a special step to highlight common problems being seen about these claims," Werfel said. "The IRS urges ERC claimants to get with a trusted tax professional and review their qualifications before time runs out on IRS disclosure and withdrawal programs."
The IRS has posted a list of warning signs that could signal future IRS problems involving ERTC claims on its website.
This article was provided to OSAP by ASAE's Power of Associations and Inroads.