IRS Reopens Voluntary Disclosure Program for Erroneous ERC Claims

by | Aug 17, 2024

ARTICLE | August 17, 2024

The Internal Revenue Service (IRS) has reopened the Voluntary Disclosure Program related to problematic Employee Retention Credit (ERC) claims. The first program period received more than 2600 applications disclosing more than $1 billion in improper claims.   The details of its announcement are found on this posting.

The initiative is part of the IRS' broader efforts to enforce compliance with tax laws in relation to the ERC, a benefit that was introduced under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The ERC was a credit against employment taxes for qualifying employers for certain quarters of 2020 and 2021.  It's aim was to support businesses that continued to provide employment during the COVID 19 pandemic.

The IRS has been intensely auditing the ERC and has identified thousands of erroneous ERC claims. These errors range from minor mistakes to serious issues such as false or fraudulent claims. The Voluntary Disclosure Program enables businesses to come forward and rectify erroneous claims voluntarily, potentially avoiding severe penalties and criminal prosecution.

Concurrent with the new VDP window, IRS is sending out up to 30,000 letters reversing and recapturing about $1 billion in claims it asserts were improperly paid.  Recipients of these notices will not be eligible for the reopened VDP.

The IRS also continues to offer a separate claim withdrawal program for those wh ohave submitted claims they now believe may have errors.  The details of this program are here: https://www.irs.gov/newsroom/withdraw-an-employee-retention-credit-erc-claim .

 

Questions or Want to Talk?

Call us directly at 972.221.2500 (Flower Mound) or 940.591.9300 (Denton), or complete the form below and we’ll contact you to discuss your specific situation.
  • Should be Empty:
  • Topic Name:

Revocable vs. Irrevocable Trusts: What’s the Difference?

Trusts are powerful estate planning tools, but not all trusts are created equal. In this video, we break down the key differences between revocable and irrevocable trusts, including control, tax treatment, creditor protection, and long-term planning implications. Whether you’re building a basic estate plan or preserving multigenerational wealth, understanding these two foundational trust structures is essential.

OBBBA: Middle-Market Business Changes

The One Big Beautiful Bill Act is redefining tax planning for middle-market businesses. Discover the five key changes impacting decisions today and shaping strategies for the future.

OBBBA: Opportunity Zones

Understand how the One Big Beautiful Bill Act reshapes Opportunity Zone incentives and what it means for your investments.

Using POD and TOD Accounts in Your Estate Plan

Discover how Payable-on-Death (POD) and Transfer-on-Death (TOD) accounts streamline the inheritance process, enabling beneficiaries to bypass probate and access assets swiftly. While these tools offer speed and cost-effectiveness, they come with potential pitfalls that could disrupt your estate plan if not carefully coordinated. Explore their benefits and drawbacks to ensure seamless asset distribution among your loved ones.

The Strategic Power of Charitable Lead Trusts: How Families Can Transfer Assets While Making an Impact

Charitable lead trusts offer families a powerful strategy to dramatically reduce estate taxes while transferring appreciating assets to the next generation and supporting charitable causes simultaneously. By leveraging today’s low interest rate environment, a $10 million CLT could potentially transfer $3.7 million or more to family members while creating a taxable gift of only $528,700. However, families must carefully weigh the substantial benefits against significant risks, including asset underperformance, irrevocable structure, and complex administrative requirements.

Maximizing Your Itemized Deductions Under the One Big Beautiful Bill Act: A Strategic Guide for 2026

The One Big Beautiful Bill Act has fundamentally reshaped the landscape of itemized deductions, creating both new opportunities and challenges for taxpayers who want to maximize their tax savings. While the SALT deduction cap increases to $40,000 and new charitable giving options emerge, taxpayers also face a new 0.5% AGI floor on charitable deductions and limitations that effectively cap itemized deduction benefits at 35% for high earners starting in 2026. Success under the new law requires strategic multi-year planning, including bunching deductions in alternating years and carefully timing major deductible expenses to avoid new limitations while maximizing available benefits.

Maximize Your Legacy While Minimizing Taxes: The Strategic Guide to Charitable Remainder Trusts

If you’re looking to support your favorite charitable causes while maintaining an income stream and achieving significant tax benefits, a charitable remainder trust (CRT) could be the perfect solution. This sophisticated estate planning tool allows you to convert appreciated assets into lifetime income while making a meaningful charitable impact—all while potentially saving thousands in taxes. Whether you hold highly appreciated stocks, real estate, or other valuable assets, a CRT offers a strategic way to diversify your holdings, reduce your tax burden, and create a lasting philanthropic legacy.