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IRS Cracking Down on ERC Claims Offers Withdraw Options – What Should You Do?

November 14, 2023
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The IRS has been cracking down on unethical practitioners who help their clients obtain Employee Retention Credit funds. Recently, the IRS put a freeze on processing all ERC claims until at least the end of 2023. What does this mean for your business?

I Have Not Claimed the ERC Yet

If you have not claimed the ERC, then we recommend filing ASAP if you do qualify. While the IRS has frozen the processing of the claims, the statute of limitations has not been frozen, so we have until 4/15/2024 to file a claim for tax year 2020 ERC claims. If you do not file by this date, then your business cannot claim the funds for tax year 2020.

I Have Filed My Claim but I’m Not Positive if I Qualify

If you have filed your claim and are not positive you qualify, contact YHB and we will be happy to review your claim. If it’s determined you most likely do not qualify, the IRS has provided several methods to return funds to avoid penalties. The method to withdraw your request would depend on if you received the funds or not and the time that you filed your request. Our team can assist you in the process to withdraw your claim to help you avoid any penalties or other tax implications.

I Have Filed My Claim and I’m Certain I Qualify

Then you are good to go! There is nothing you need to do but wait for the funds to reach you. Be sure to amend your income tax returns for the year of the credit as well. For example, if you claim the ERC for tax year 2020, then you’ll need to amend 2020 income tax returns to pay taxes on the credit. Our advisors are ready and willing to help you file any amendments needed to finish up filing your ERC claim.

About the Author

Nick Preusch, CPA, JD, LLM, MSA

Nick joined YHB in 2020 with over 15 years of experience in the industry. Nick is a graduate of Carthage College with a BS in Accounting and Business, the University of Connecticut with an MA in Accounting, Case Western Reserve University with a JD, and Georgetown University with an LLM in taxation. Nick has also worked with the Internal Revenue Service as a Revenue Agent and an Attorney with the IRS Office of Professional Responsibility.

Nick’s expertise includes helping high wealth individual and large business entities with complex tax compliance, along with specializing in international, non-for-profit tax issues, and tax ethics issues.

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