Internal Revenue Service Cautions Taxpayers About Questionable Employee Retention Credit Claims

On September 14, 2023, the Internal Revenue Service (IRS) issued two press releases cautioning taxpayers about unscrupulous promoters of the Employee Retention Credit (ERC).¹ The first release indicates that the IRS will no longer process new claims for the ERC until at least December 31, 2023. This measure is being taken to protect business owners from filing ineligible claims and being required to pay back the benefits, without fully understanding the program or consequences of filing an ineligible claim. After finding that many claims did not qualify for the credit, the IRS has taken a more cautious approach in reviewing credit applications. In doing so, the IRS has found that many small businesses have been scammed by unscrupulous promoters.

The warning about “aggressive marketing by nefarious actors” is the subject of the second press release. The release warns taxpayers that improperly filed and paid claims may result in criminal investigation and the requirement to pay back the credit as well as being fined penalties and interest. The IRS is advising taxpayers that wish to claim the credit to do so by working with a trusted tax professional.

If you have questions or concerns about the eligibility of an active or potential ERC claim, please reach out today to one of the Ryan professionals listed below to vet your claim or fact pattern.

¹ IR-2023-169; IR-2023-170.

TECHNICAL INFORMATION CONTACTS:

Kevin Cappock
Principal
Ryan
813.879.5127
kevin.cappock@ryan.com

Melissa Munoz
Principal
Ryan
505.312.4665
melissa.munoz@ryan.com

Allea Newbold
Principal
Ryan
813.228.7100
allea.newbold@ryan.com

Sharon Roberts
Principal
Ryan
512.476.0022
sharon.roberts@ryan.com

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.