Blog

IRS Disallowing 20,000 Employee Retention Credit (ERC) Claims

Article Highlights:

  • Initial ERC Claim Disallowance Letters Issued

  • Dubious TV Promotions

  • Claim Withdrawal Process

  •  How These Letters Help Taxpayers

In its ongoing effort to combat questionable Employee Retention Credit (ERC) claims, the IRS has sent more than 20,000 letters advising taxpayers that the agency is disallowing their claims. This initial batch of letters is going to businesses that did not exist or did not have paid employees during the eligibility period (March 13, 2020, and December 31, 2021) to claim the claim the credit.

 We previously posted a September 29th article cautioning business owners to be cautious of the aggressive marketing on TV related to ERC claims which was followed by a November 9th article that included a procedure for those who made ineligible clams to withdraw the claims and avoid future problems with the IRS.

These disallowance letters have identified ineligible claims before they're paid, and:

  • Help ineligible taxpayers avoid audits, repayment, penalties, and interest, as well as

  • Protect taxpayers by preventing an incorrect refund from going to an ERC promoter.

This is only part of the IRS’s enforcement activities, and the IRS plans additional letters in the future. The IRS continues to warn taxpayers to use extreme caution before applying for the ERC as aggressive maneuvers continue by marketers and scammers. However, those who willfully filed a fraudulent claim, or those who assisted or conspired in such conduct, should be aware of potential criminal investigation and prosecution.

Please contact this office with questions or assistance.

Share this article...

Never miss a story.

Sign up for our newsletters and get our articles delivered right to your inbox.

I confirm this is a service inquiry and not an advertising message or solicitation. By clicking “Submit”, I acknowledge and agree to the creation of an account and to the and .

Social Media

Location

73733 Fred Waring Dr Ste 105
Palm Desert, California 92260
How Can We Help? Have a question?
Hello, the CGC bot can help answer your questions 24/7. For other questions not listed here use the Ask Me A Question form and one of our staff will respond within 48 hours.
Please fill out the form and our team will get back to you shortly The form was sent successfully