The IRS put in place a moratorium on Employee Retention Credit processing for new claims on September 14, 2023 to more closely evaluate rampant fraud in existing applications. Many taxpayers who submitted claims within the last year have been waiting to hear when the processing would resume; there are many claims submitted before the moratorium deadline that have also been delayed. Luckily, on Friday, March 22, 2024, the IRS put out a news release, saying:
“A specific [ERC processing] resumption date hasn’t been determined but, at this point, the IRS anticipates it will be sometime in the late spring. This pause will help the IRS review the ERC inventory with strong, new measures of scrutiny in place. During the upcoming months, the IRS plans to complete the transcription of amended paper returns with the help of digitalization and deploy new risk analysis strategies to identify additional compliance work. Deploying these new risk analysis strategies is necessary before the IRS will resume processing of claims submitted after the September 14 moratorium. In the meantime, the IRS continues to process ERC claims submitted before the moratorium, but with more scrutiny and at a much slower rate than before the agency’s approach changed last year.”
(2024, March 22). IRS Employee Retention Credit compliance effort tops $1 billion threshold since fall; Voluntary Disclosure Program suspended after March 22, special withdrawal program remains open as audits, investigations intensify [Press release]. https://www.irs.gov/newsroom/irs-employee-retention-credit-compliance-effort-tops-1-billion-threshold-since-fall-voluntary-disclosure-program-suspended-after-march-22-special-withdrawal-program-remains-open-as-audits
The IRS continues to be “deeply concerned about widespread abuse involving these claims that have harmed small businesses,” IRS commissioner Danny Warfel said. Taxpayers who believe they qualify are still able to apply for 2020 Employee Retention Credit claims by April 15, 2024, and 2021 claims by April 15, 2025. REDW’s expert state and local tax team is ready to help these taxpayers determine whether they qualify and prepare the claims for them.
