In an effort to combat what officials are calling a surge in fraudulent and overstated claims for a pandemic-era tax break, the Internal Revenue Service (IRS) has taken its most significant step yet. The IRS recently announced an immediate halt to the processing of new refund requests related to the Employee Retention Credit (ERC) until at least 2024.
Key Insights:
- The ERC, initially created by Congress in 2020, was designed to provide businesses with an incentive to retain their employees during the challenging times brought on by the pandemic.
- The IRS’s decision aims to shield legitimate businesses from falling victim to misleading marketing tactics.
- The IRS’s move underscores the importance of understanding eligibility criteria and adhering to proper procedures when claiming tax credits.
This pause in processing, while aimed at safeguarding the integrity of the tax system, may also impact eligible businesses in need of these funds. Delayed payments can result in additional interest payments to taxpayers.
The IRS’s move to halt the processing of new ERC refund requests until 2024 is a significant step in addressing concerns about fraudulent claims.
