IRS makes major Announcements regarding Employee Retention Credit (ERC)

ARTICLE | September 20, 2023

This article updates you regarding the Employee Retention Credit (ERC). On September 14, 2023 the Internal Revenue Service (IRS) issued two press releases: IR-2023-169 “To protect taxpayers from scams, IRS orders immediate stop to new Employee Retention Credit processing amid surge of questionable claims; concerns from tax pros” and IR-2023-70 “Red flags for Employee Retention Credit claims; IRS reminds businesses to watch out for warning signs of aggressive promotion that can mislead people into making improper ERC claims.”

The IRS announced in IR-2023-169, that it will stop processing new ERC claims until at least the end of 2023. This decision was made in response to concerns about “a flood of improper ERC claims.” 

We understand that this announcement may be concerning for businesses that are awaiting refunds or who have not yet filed for the ERC. However, we want to assure you that the IRS will continue to process previously filed claims, although it announced that processing times could stretch to 180 days or longer. We also want to reassure you that this announcement does not mean that additional claims may no longer be filed. The IRS does, however, encourage businesses to work with a trusted tax professional (and not a “promoter or marketing firm”) in reviewing the eligibility for the program prior to submitting a claim. 

The statute of limitations for filing ERC claims is three years from the date the relevant payroll tax return was originally due, or two years from the date the tax was paid, whichever is later. This means that, if eligible, businesses can still file for 2020 and 2021 ERC.

We know that the ERC eligibility criteria and filing process are complex.  We are here to help. If you have any questions or need assistance with filing your ERC claim, please do not hesitate to contact us.