IRS Pauses Employee Retention Credit Processing

On September 14, 2023, the IRS announced an immediate moratorium on the processing of new Employee Retention Credit (ERC) claims. The moratorium, which will run at least through December 31, 2023, is in response to concerns regarding a high volume of fraudulent credit claims. The purpose is to provide the IRS an opportunity to put additional safeguards in place to help protect businesses from aggressively marketed scams involving ERC claims.

The IRS will continue to process ERC claims filed prior to the moratorium but has emphasized that length of processing times will increase due to the enhanced compliance review that is part of efforts to protect against fraud.

New initiatives are also being developed by the IRS for businesses who fell victim to scams, including a special withdrawal option for ERC claims that have already been filed but have not yet been processed. A new question and answer guide was also released by the IRS to provide businesses with key information to help determine their eligibility to claim the credit. The IRS also encourages businesses who have filed a pending claim to review the program guidelines with a trusted tax professional. If you would like to discuss in more detail how the moratorium and updated information on the ERC impacts your business, please reach out to your trusted MHCS advisor.