Posted by Robert Bryant, Esq., CPA on 08.15.24
The IRS recently released IR-2024-203 and announced that the Service is making progress with Employee Retention Credit (ERC) claims. In short, the Service is taking affirmative steps to both prevent improper payments while at the same time, accelerate the processing of legitimate claims.
For literally thousands of valid ERC claimants, this is very encouraging news. Indeed, this is the first notice that the Service has emphatically acknowledged that they are moving forward with the processing of the thousands of outstanding ERC applications. Further, the notice mentions that it will release some 50,000 ‘low risk’ ERC claims, ‘to be paid out quickly’, where the Service is projecting the payments to start as soon as September 2024. Previously, no ERC claims submitted after September 14, 2023 were being processed due to the moratorium, but the Service will now start processing the claims once again.
The notice further mentions that the Service will focus on ERC applications that are both high-risk and low-risk claims. Meaning, they will act on those claims deemed to have a good reason to pay or deny a refund claim. The IRS has identified 50,000 valid ERC claims as being low-risk, and are moved into a queue for accelerated payment processing in coming weeks, which for some taxpayers, could be as early as September 2024.
Continued Scrutiny and Denial of Improper Claims
The notice also stated that the Service will continue to scrutinize and deny improper claims while also ramping up audits and investigations into potential fraud and abuse. In response to concerns about misleading marketing and high rates of improper claims, the IRS has sent out 28,000 disallowance letters and initiated 460 criminal cases. Clearly the IRS is continuing to take a cautious approach to balance the needs of legitimate business claims against the need to prevent improper ERC payments.
Have questions?
If you have any about your pending ERC claim or have other questions, please feel free to get in touch with Tax Point Advisors. Tax Point Advisors can help you determine whether your business ’activities meet the qualifications by conducting a free assessment. To learn more about tax benefits from the Employee Retention Tax Credit, please call us at (800) 260-4138 nationwide.
