02/12/2024

IRS Rolls Out ERTC Voluntary Disclosure Program for Employers

Those eligible to participate in the program may benefit in several ways

Since July 2023, the Internal Revenue Service (IRS) has taken a series of actions in response to what it has termed a “flood of ineligible claims” for the Employee Retention Tax Credit (ERTC). Most recently, it launched a Voluntary Disclosure Program (VDP). The program presents a valuable, but temporary, opportunity for eligible employers.

ERTC History Recap

The ERTC is a refundable tax credit intended for businesses that 1) continued paying employees while they were shut down due to the pandemic in 2020 and 2021, or 2) suffered significant declines in gross receipts from March 13, 2020, to Dec. 31, 2021 or are deemed a recovery startup business. 

With the credits worth up to $26,000 per retained employee, fraudulent promoters and marketers quickly pounced, offering to help employers file claims in exchange for large upfront fees or percentages of the money received. But the requirements for the credit are stringent, and many employers were misled into filing claims that have proven to be invalid, leaving those claimants at risk of liability for credit repayment, penalties and interest, as well as other tax problems.

Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett.