On September 14, 2023, the IRS announced a moratorium on processing new Employee Retention Credit (ERC) refund claims through the end of the year.
The move is to address the large backlog of claims already filed as well as to protect consumers and business owners from the notable cases of misuse and fraudulent schemes targeting the program.
What does this mean for taxpayers?
- The IRS will continue to process ERC refunds for previously submitted claims.
- Expect longer wait times of up to a year to receive an already filed claim and be prepared the IRS may request more documentation prior to processing and validating the claim.
- The IRS urges employers who have already filed an ERC claim to consult a trusted tax advisor regarding eligibility requirements.
- The IRS will issue guidance how to return the money if an employer no longer believes it is eligible for the credit.
- For those who haven’t filed a claim yet, consider reviewing the IRS guidelines and waiting to file.
Reliable Tax Services
During these uncertain times, the importance of having a trustworthy partner cannot be overstated. Percipio Business Advisors prides itself on its reputation for integrity and knowledge of the tax landscape. Our team is equipped to work with you as you proceed with the next steps.
Determining Your Eligibility
With the moratorium in place, now is the perfect time to assess or reassess your business’s eligibility for the ERC. Our experts will guide you through the criteria and ensure the validity of your claim.
Processing of Existing Claims
If you have already submitted a claim and are awaiting its processing, we can provide guidance on how to reinforce your claim’s authenticity, ensuring it passes the IRS’s scrutiny.
If you believe your claim may be invalid or you worked with a less-than-reputable partner to file your claim, we will work with you to review your claim and determine if it is in your best interest to withdraw your claim.
Filing New Claims
The ERC was first enacted via the Coronavirus, Aid, and Economic Security Act (CARES Act) and subsequently amended and updated, most recently via the Inflation Reduction Act. Thus, the IRS does not have the ability to cancel the ERC program without a congressional act. The moratorium is on the IRS processing new claims, not on the claims themselves. When the moratorium lifts, there will undoubtedly be a rush to file claims.
We suggest that businesses with legitimate and unfiled ERC claims file as usual, while the moratorium is in effect, to beat the post-moratorium rush. We can help you prepare the necessary documentation and strategize the best time and method for filing to ensure a smooth process.
Working with Percipio Business Advisors
Working with reliable and professional tax and ERC experts like Percipio Business Advisors can streamline the process and ensure proper qualification.
It’s imperative to take the most effective steps to protect yourself, your organization, your employees, and your customers.
Questions? Contact one of our CPAs today!
Justin Niederklein, CPA
Vice President
jniederklein@percipiobusiness.com
402-630-2971
Nick Burianek, CPA
Vice President
nburianek@percipiobusiness.com
402-630-2971