IRS Halts Processing of New Claims for Employee Retention Credit to Combat Fraudulent Activities
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The Internal Revenue Service (IRS) has announced a moratorium on processing new claims for the Employee Retention Credit (ERC) until the end of the year.
The move is aimed at preventing scams and protecting small business owners from fraudulent claims. The IRS has expressed concerns about the increasing number of ineligible claims and aggressive marketing tactics by promoters.
While existing ERC claims will continue to be processed, the compliance review process will be stricter, resulting in longer processing times. The IRS is also working with the Justice Department to pursue fraud cases and investigate promoters who have violated the rules.
The IRS has already initiated hundreds of criminal cases and referred thousands of ERC claims for audit. The agency is urging businesses to seek guidance from trusted tax professionals and to review IRS resources to determine their eligibility for the credit. The IRS is also developing initiatives to assist businesses affected by fraudulent claims, including a settlement program and a special withdrawal option for those whose claims have not been processed.
If you need assistance, please do not hesitate to contact us for a review of your ERC eligibility.
Olena Ruth | Tax Defense Attorney
Olena represents the taxpayers in federal and state tax audits, collection matters, administrative appeals, and the U.S. Tax Court’s cases. She is actively engaged in Tax Sections of the American Bar Association and Colorado Bar Association. She serves as Colorado Bar Association’s pro-bono attorney and liaison to the Internal Revenue Service. Her speaking engagements include presentations on tax matters in family law, employment tax issues, and communication with the IRS.
Olena can be reached at olena@ruthtaxlaw.com
