Scammed on the Employee Retention Credit (ERC)? An early Christmas present from the IRS will let you keep 20 percent!
On Dec. 21, 2023, the IRS made an announcement regarding the Employee Retention Credit Voluntary Disclosure Program (ERC-VDP). This program is intended for employers who claimed and received an ERC refund for a quarter, but who were actually not eligible. Under this program, claimants have the option to repay the ERC at a reduced rate of 80 percent of the credit. Additionally, the program waives penalties and interest on the full amount, not just the 80 percent that is returned.
It is important to note that the IRS is accepting applications for the program only until March 22, 2024. Applicants will be required to sign a closing agreement stating that they are not entitled to the ERC and provide the name and contact information of any preparer or advisor that assisted in claiming the ERC.
The IRS also announced that they are issuing another round of disallowance letters proposing adjustments to tax for 20,000 employers that claimed an erroneous amount of ERC. The mailing reflects just part of the ongoing IRS review of these claims.
