Hey there, small business owners! If you’ve been keeping an eye on the Employee Retention Credit (ERC), here’s some important news from the IRS that might affect you.
What’s Happening with the ERC?
The IRS is ramping up its efforts to manage the ERC program, which was designed to help businesses during the pandemic but has seen a surge in claims, some of which may not be entirely legitimate. To ensure that businesses get the support they need while preventing misuse, the IRS is taking several key actions:
Speeding Up Payments: The IRS is now processing and accelerating payments for 50,000 valid ERC claims. If your claim is in this low-risk group, expect payments to start rolling out in September, with more to follow in the fall.
Handling Improper Claims: The IRS has sent out 28,000 disallowance letters to businesses whose claims were flagged as potentially incorrect. This move is estimated to prevent up to $5 billion in improper payments. They're also stepping up audits and investigations into potentially fraudulent claims, with 460 criminal cases already initiated.
Appeal Options: If you receive a disallowance letter and believe it was issued in error, don’t worry—you have options. The IRS has an appeals process in place. Check the IRS website or the details on your notice for guidance on how to appeal.
Ongoing Monitoring: The IRS is carefully balancing the need to process valid claims with the need to scrutinize potential fraud. They’ve identified 50,000 valid claims and are working to get these processed while remaining vigilant against improper claims.
What This Means for You
For Eligible Businesses: If your ERC claim is valid and not flagged for issues, you’re likely to receive your payment soon. Keep an eye out for updates from the IRS.
For Those Facing Denials: Review your disallowance notice carefully. You can appeal if you believe your claim was wrongly denied. The IRS is committed to correcting errors and will work with you to resolve any issues.
Stay Informed: The IRS is actively working to improve its ERC processing and is staying in touch with tax professionals to make sure businesses like yours get the help they need.
Stay Updated
For the latest updates on the ERC and other tax-related news, keep an eye on the IRS website. If you have specific questions about your ERC claim, consider reaching out to a tax professional who can provide personalized advice.
The IRS is dedicated to ensuring that businesses get the support they need while addressing the challenges posed by improper claims. It’s a complex process, but rest assured, they’re working hard to make sure you get the help you deserve.
Feel free to reach out with any questions or concerns about your ERC claims, and don’t hesitate to get professional advice to navigate this evolving landscape.
Happy filing!
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