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:

The IRS and Your Partnership: What a Landmark Court Ruling Means for Your Tax Bill

A federal appeals court just rewrote the self-employment tax rules for limited partnerships — and if your business operates in Texas, Louisiana, or Mississippi, the change applies to you now. The Fifth Circuit’s landmark decision in K Alain, L.L.L.P. v. Commissioner replaced two competing legal standards with a brand-new test: does the partner play a significant role in managing or running the business? The answer could mean tens of thousands of dollars in SE tax savings — or an unexpected IRS bill.

The Great Wealth Transfer: How Real Estate Owners Can Protect and Pass On Their Legacy

Trillions of dollars in real estate assets are set to change hands as baby boomers pass wealth to the next generation, and how that transition is handled will determine whether families thrive or struggle. Whether you own a single investment property or a complex real estate portfolio, understanding your options for ownership structure, tax planning, and succession is not just smart, it’s essential. This article breaks down the strategies every real estate owner should have on their radar.

Your Corporate Tax Rate Is Only Half the Story

A lower tax rate feels like a win — but it may only be telling half the story. New research reveals that cost recovery provisions, system complexity, and investment incentives often drive more value than the rate alone. Is your tax strategy built around the full picture?

Is Your Dental Practice Growing or Just Getting Busier? The Financial Blind Spots Costing You More Than You Think

Dental practice owners are working harder than ever, yet many are finding it increasingly difficult to predict where their finances will land at the end of the month. The culprit is not a lack of patients or revenue — it is the gap between what the numbers show and what they actually mean. From escalating overhead to operational inefficiencies hiding in plain sight, the forces quietly undermining profitability deserve a closer look. This article breaks down what is really happening inside dental practices today and what it takes to build a financial foundation that can keep pace with growth.

Building a Stronger Financial Foundation: How Outsourced Accounting Helps Construction Companies Scale

Growth is the goal for every construction contractor, but scaling a business means more than winning bigger projects. As companies move through each stage of development, the financial complexity grows right along with the revenue. Without the right accounting infrastructure in place, that growth can quickly become a liability. Outsourced accounting offers construction companies a smarter path forward, delivering clear visibility into project performance, tighter financial controls, and the strategic insight needed to grow with confidence.