The IRS, with its Criminal Investigation (CI) arm, has urged businesses to review eligibility for the Employee Retention Credit (ERC). To combat fraud, they intensified compliance efforts related to this pandemic-era credit. Businesses wrongly claiming the ERC are advised to consider applying for the Voluntary Disclosure Program before the March 22 deadline. A special withdrawal program is also available for those with eligibility concerns on pending claims. Both programs aimed to help employers to avoid penalties and interest on incorrect claims. CI special agents plan to conduct nationwide educational sessions in February for tax professionals, focusing on the ERC. These sessions, part of a broader initiative, will be held in at least 23 U.S. states and the District of Columbia. The IRS has implemented several initiatives to address inappropriate claims by businesses. Some key points are listed below.

ERC Voluntary Disclosure Program (Open until March 22, 2024):

  • businesses with erroneous claims and received payments can participate;and
  • the program runs until March 22, 2024.

Withdrawal Program for Pending ERC Claims:

ERC Eligibility Information:

  • special information is available to help businesses understand Employee Retention Tax Credit guidelines; and
  • resources include ERC FAQs and the ERC Eligibility Checklist, offered as an interactive toolor a printable guide.

Increased IRS Compliance Activity:

  • letters notifying taxpayers of disallowed ERC claims have been sent;
  • letters related to claiming an erroneous or excessive credit are planned; and
  • ongoing compliance efforts include Audits, Civil Investigations, and Criminal Investigations.