Over the last few years, the IRS had been working through a large backlog of unprocessed returns, delayed taxpayers’ communications, and improperly mailed out notices. At the same time, there were significant customer service issues which made it extremely difficult to get telephone, and other types of support. These issues which had been plaguing the agency have been largely resolved. The $80B in funding provided through the Inflation Reduction Act provided the resources necessary to address these challenges. Now the agency is turning its attention toward the going problem of Employee Retention Tax Credit fraud.
The IRS announced last week (in IR-2023-169) a moratorium on processing new ERTC claims through the end of 2023. The reason for the change is the increase in the number of ineligible claims that are being filed. It appears many of these are coming from businesses that have been pressured and scammed by aggressive promoters and marketing firms. The agency will continue processing claims received prior to September 14th but cautions it will now take longer due to increased fraud concerns. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key details below.
The recent announcement signals a significant shift in terms of how the IRS will be processing ERTC claims. Not only will no new claims be processed, but existing claims will take longer to review. Due to stricter compliance reviews, it is estimated processing time will increase from 90 to 180 days or more if a claim is selected for further review or audit. These additional steps are not only essential to identifying fraud, but also to protect taxpayers from the penalties and interest arising from improper claims.
Given the change, the IRS has provided advice for taxpayers in different stages of the claim process, including:
There will also be a new settlement program announced in autumn which will allow businesses to repay the claim with limited penalties.
Contact Us
The recently announced moratorium means taxpayers will have to wait substantially longer to have claims processed. This does not mean an eligible Georgia company should not file a legitimate claim. If you have questions about the information outlined above or need assistance with an ERTC claim review, Wilson Lewis can help. For additional information call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.
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