02/22/2024

IRS Urges Businesses to Review ERTC Claims

They must do so before March 22, 2024

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.