ERC Claim Processing Halted by the IRS (9/14/23)
On September 14, 2023, IRS Commissioner Danny Werfel ordered an immediate moratorium on processing new claims for the Employee Retention Credit through at least December 31, 2023. This follows growing concerns about a substantial share of ineligible new claims that are increasingly putting businesses at risk who have been pressured and scammed through aggressive promoters and marketing. The moratorium on processing new claims will allow the IRS to add additional safeguards to prevent future abuse and protect businesses from predatory tactics.
What Does This Mean for You?
- The IRS has put a temporary pause on receiving new ERC claims through at least December 31, 2023.
- If you’ve submitted a claim prior to September 14, 2023 the IRS will continue processing these claims during the moratorium period but at a greatly reduced speed due to the complex nature of the filings and the need to protect businesses from being improperly paid. Normal processing times are expected to stretch to 180 days or longer. The IRS cautions that many applications will be facing additional compliance scrutiny, which means the payments could take even longer to be processed.
- For those considering filing a claim, the IRS urges businesses to carefully review the ERC guidelines during the processing moratorium period. The IRS recommends that businesses seek the help of a trusted tax professional to assist with the filing of the ERC, not a promoter or aggressive marketer.
- The IRS is developing new initiatives to help businesses who found themselves victims of aggressive promoters. This includes a settlement program for repayments for those who received an improper ERC payment; more details are expected to be available in the fall.
- If a business claimed the ERC and the claim has not been processed or paid by the IRS, they can withdraw the claim if they now believe it was submitted improperly – even if their case is already under audit or awaiting audit. The IRS is expected to release more details on this shortly.
- You should review the IRS list of red flags to help you be aware of aggressive marketing and questionable ERC claims and avoid falling victim to a scam.
What Can Janover Do For You?
We are a CPA firm with nearly 90 years of history that has a deep understanding of the Employee Retention Credit rules and guidance. We plan on continuing to educate both business owners who have already filed for the credit as well as those that have not yet filed for the credit.
Janover is ready to work with you to evaluate eligibility, calculate your credit and navigate the process today as we await future updates from the IRS and support you in filing your claim once the temporary pause is lifted. As the law stands, the 2020 and 2021 credits are set to expire on April 15th, 2024 and April 25, 2025, respectively.
We are here to answer any questions.
Please read the official statement from the IRS released on September 14, 2023 for more information.