The IRS has said that is was common for some ERTC promoters to tell taxpayers that every employer qualifies for the ERTC. The IRS and the tax professional community emphasize that this is not true. Eligibility depends on specific facts and circumstances.
What if you were a victim of an ERTC promoters false claims?
Solution: Special IRS Withdrawal Program remains open for those with unprocessed ERC claims.
According to the IRS, given the large number of questionable claims still in review it urges those with unprocessed claims to consider the special IRS ERC Withdrawal Program to avoid future compliance issues.
The IRS states that businesses should quickly pursue the claim withdrawal process if they need to ask the IRS to not process an ERC claim for any tax period that hasn’t been paid yet. Taxpayers who received an ERC check — but haven’t cashed or deposited it — can also use this process to withdraw the claim and return the check. The IRS will treat the claim as though the taxpayer never filed it. No interest or penalties will apply.
With more than 1.4 million unprocessed ERC claims, the claim withdrawal process remains an important option for businesses who may have submitted an improper claim. Companies may now realize they have fallen victim to ERTC promotors claims that they qualified for refunds when in fact there was no such opportunity.
The IRS also recently announced that compliance efforts around erroneous ERC claims have now topped more than $2 billion since fall of 2023. This is nearly double the amount announced in March 2024 following completion of the special ERC Voluntary Disclosure Program (VDP), which the IRS announced led to the disclosure of $1.09 billion from over 2,600 applications. The IRS is currently considering reopening the VDP at a reduced rate for those with previously processed claims to avoid future compliance action by the IRS.
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