Update on IRS Processing of ERC Claims

Update on IRS Processing of ERC Claims

Recently, the IRS has begun processing older Employee Retention Credit (ERC) claims filed before the moratorium date of September 15, 2023. A significant number of these early submissions have been identified as improper and will be denied in the coming weeks.

Here’s what you need to know:

  • Payment Releases: The IRS plans to release payments this summer for 10–20% of the pre-moratorium claims deemed low-risk. Processing for the remaining 60–70% of non-high-risk claims will also begin later this summer.
  • Continued Moratorium: The processing halt for claims submitted post-September 14, 2023, remains in effect. The IRS is also considering reopening the Voluntary Disclosure Program under less favorable terms to prevent future compliance issues.
  • Current ERC Claim Volume: Despite the moratorium, the IRS continues to receive about 17,000 ERC claims weekly, leading to system inefficiencies.
  • Communication Advisory: Taxpayers and tax professionals are advised against contacting IRS toll-free lines for claim updates, as agents will not have access to relevant information.

RJI CPAs Insight

During a recent testimony, IRS Commissioner Danny Werfel highlighted that billions in improper claims are set to be denied following a comprehensive internal review. Commissioner Werfel has also urged Congress to officially close the ERC program to new applicants, citing significant ongoing issues. Some Senate lawmakers are considering the recommendation as a way to pay for other tax credits.

Contact RJI CPAs

We are closely monitoring these developments. If you have concerns about how these updates might affect your business or need assistance with your ERC claims, please don’t hesitate to reach out to us.

Stay informed and prepared with RJI CPAs.

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