ERC for MTRS Clients

May 21, 2024

Key Points:

• Over $1 billion protected from fraudulent ERC claims.
• Voluntary Disclosure Program suspended after March 22, 2024.
• Businesses can still withdraw unprocessed claims.
• IRS intensifies audits and investigations into fraudulent claims.
• New claims on hold until the IRS implements stricter scrutiny measures.

The IRS has taken significant action to address fraudulent Employee Retention Credit (ERC) claims, protecting over $1 billion in taxpayer funds since last fall. This initiative includes:

• Suspension of the Voluntary Disclosure Program: This program, which allowed businesses to repay incorrect claims with reduced penalties, has been suspended after March 22, 2024.

• Ongoing Claim Withdrawal Process: Businesses with unprocessed claims can still withdraw them to avoid penalties and interest.

• Increased Scrutiny and Enforcement: The IRS has intensified audits, promoter investigations, and criminal investigations, resulting in over $572 million in assessments and multiple convictions.

• New Claim Processing Moratorium: New ERC claims submitted after September 14, 2023, are on hold while the IRS implements stricter scrutiny measures.

The IRS announced a moratorium on processing new ERC claims starting September 14, 2023, due to concerns about fraudulent activity. While a specific resumption date is still undetermined, the IRS anticipates it will be sometime in the late spring.

During this pause, the IRS is implementing stricter scrutiny and risk analysis to ensure the legitimacy of claims. This includes digitalizing amended paper returns and deploying new compliance strategies.

While new claims remain on hold, the IRS continues to process claims submitted before the moratorium, albeit with increased scrutiny and a slower pace.

Stay tuned for updates for more ERC updated with MTRS now.

February 9, 2024

The House passed The Tax Relief for American Families and Workers Act of 2024 on January 31, 2024. This act proposes an important change: moving the deadline for submitting Employee Retention Credit (ERC) claims to January 31, 2024, for all periods, including 2021. It's now under Senate review.

MTRS is actively monitoring developments and is here to guide you through these changes.

ERC Moratorium

The IRS announced on September 14, 2023, that it will not process new claims until at least January 1, 2024. The IRS Commissioner has not confirmed whether the program is fully operational again. From the date of filing, they are asking for up to 180 days to allow for processing time. We send everything with certified mail to ensure the IRS receives our package. Please be patient and understand the timeline is controlled by the IRS and beyond our influence.

If you would like to read more on the recent update, you can do so here.

What This Means for You:

• Deadline Change: If the act becomes law, the new January 31, 2024, deadline will apply to all ERC claims. As the deadlines has passed, we're ready to assist our clients with questions on this accelerated timeline. We have put on hold processing any new claims at this time until further notice.
• Previously Filed Claims: ERC claims already submitted and processed by MTRS before the new deadline won't be affected.
• Refund Processing: Expect a delay in refund issuance for claims already filed. The IRS is processing these at a much slower speed. We have not seen one new check be released since the moratorium was put in place on September 14th.

MTRS’s Actions and Support:

• Advocacy: We're in close communication with the IRS to ensure the continued processing of ERC claims. MTRS advocates for our clients to minimize any potential delays and impact.
• No Advance on ERC Funds: MTRS doesn't offer advances on ERC refunds. We'll notify you as soon as your refund is processed and available. If you're in need of immediate funding, please reach out to us for recommendations and referrals.
• Documentation and Refund Issuance: Clients will be informed on how to submit any additional necessary documentation for their ERC claims. Refunds will be processed accordingly. 

MTRS will contact each client upon first word on their individual claim.