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IRS Halts Processing of ERC Claims

By Joel N. Crouch on September 14, 2023
On September 14, the IRS announced that it was immediately stopping processing of any new Employee Retention Credit (ERC) claims amid a surge in questionable claims. The moratorium on processing is effective immediately and will run through at least the end of the year. The announcement can be found here .

According to the announcement, the IRS will continue to work all ERC claims received prior to the moratorium but processing times will be longer due to increased fraud concerns. The IRS said the targeted processing time for pending ERC claims will go from 90 days to 180 days.

The IRS had previously announced that it was shifting resources, including intensifying audit work and criminal investigations on promoters and businesses filing dubious claims. In July, the IRS arrested a return preparer for allegedly seeking almost $125 million in improper ERCs based on approximately 1400 false or fraudulent claims.

The IRS said it is developing initiatives to assist businesses that were victims of aggressive promoters, that include a procedure for withdrawing pending claims and a settlement program to repay claims and avoid penalties. Details on these initiatives are expected to be announced in the fall.

If you have any questions about this blog post or any other tax-related topic, please do not hesitate to contact me at jcrouch@meadowscollier.com or (214)749-2456.