To curb fraudulent claims for the employee retention credit (ERC), the IRS has implemented an immediate moratorium on processing new claims that will extend until at least the end of 2023. The ERC was a refundable tax credit for businesses that paid workers during the COVID-19 pandemic while their operations were fully or partially suspended because of a government order or for those with a significant decline in gross receipts during the eligibility period.
The IRS will provide details about how a taxpayer can withdraw an ERC claim, an option available to the filers of more than 600,000 claims awaiting review. The agency is also working out details of a settlement initiative that will allow taxpayers to repay a claim they erroneously received to avoid penalties and future compliance action.
Additional details can be found in the Journal of Accountancy article.
