IRS Resumes Processing Employee Retention Credit Claims

The IRS has resumed processing Employee Retention Tax Credit (ERC) claims filed between September 14, 2023, and January 31, 2024, after a moratorium aimed at addressing rampant fraud. The agency will prioritize low-risk claims, releasing over 50,000 payments in the coming weeks, while continuing audits and investigations into potentially fraudulent claims associated with aggressive marketing by promoters. Since the initiation of the moratorium, the IRS has sent disallowance letters to 28,000 businesses, preventing an estimated $5 billion in improper payments. Businesses can still amend tax returns for the ERC until April 15, 2025. IRS Commissioner Danny Werfel emphasized the complexity of administering the ERC, balancing the need to protect taxpayers while ensuring legitimate claims are paid. The IRS continues to face challenges due to misleading marketing and a high volume of claims, with ongoing criminal investigations into fraudulent activities.