IRS retrieves funds awarded to businesses through fraudulent COVID-era tax credit program

Fighting Fraud: IRS Takes Aggressive Steps to Protect Employee Retention Credit Program

The Employee Retention Credit (ERC) was created to help businesses retain employees during pandemic-related shutdowns, but unfortunately, it became a victim of fraud. The credit’s eligibility rules were too complex, and scammers exploited this.

In response, the IRS implemented a voluntary disclosure program that ended on March 22. Over 500 taxpayers participated in the program, returning $225 million in error. An ongoing program has led to 1,800 businesses withdrawing $251 million in unprocessed claims. Additionally, the IRS conducted audits of over 12,000 businesses with over 22,000 improper claims, resulting in assessments of $572 million. This helped uncover widespread abuse of the ERC that harmed many small businesses.

IRS Commissioner Danny Werfel expressed concern about this issue but also stated that the results of these initiatives have been promising in helping misled businesses. The IRS had stopped processing new claims in September but plans to resume processing in the spring. At the same time, $3 billion in claims are currently under review by IRS Criminal Investigation as part of efforts to address fraud and abuse related to the ERC.

The Employee Retention Credit (ERC) was intended to assist businesses retain their employees during pandemic-related shutdowns; however, it was exploited by scammers due to its complex eligibility rules.

To recover funds that were improperly distributed under ERC, the IRS launched initiatives aimed at identifying and correcting errors made during claim processing. These initiatives included a voluntary disclosure program that ended on March 22 and an ongoing program that has led to more than 1,800 businesses withdrawing $251 million in unprocessed claims.

The IRS also conducted audits of over 12,000 businesses with over 22,000 improper claims resulting in assessments of $572 million.

Despite concerns about widespread abuse of ERC by scammers and small business owners who took advantage of its complexity

Leave a Reply

Red Sox President who led team to three World Series titles, Larry Lucchino, passes away at 78 Previous post Former Boston Red Sox President Larry Lucchino: A Legendary Leader who Shaped Baseball History with His Unique Talent and Passion
Bladder Cancer Glows Pink under Blue Light Next post Shining a Light on Bladder Cancer: How UC San Diego Health is Using Innovative Technology to Detect and Monitor the Disease