IRS Pulls the Plug on Employee Retention Credit Claims:
In a recent move, the IRS has stopped processing Employee Retention Credit (ERC) claims due to rampant fraud and abuse. The ERC was designed to provide tax credits to employers who kept employees on payroll during the pandemic.
However, the well-intentioned program opened the floodgates for scammers and promoters, who aggressively filed fraudulent claims, often for businesses that didn’t qualify or didn’t even exist. The IRS realized the same patterns of fraud seen in the PPP program and decided to halt ERC processing entirely. With legitimate claims likely already filed years into the pandemic, the remaining influx is suspected to be largely fraudulent. While the decision may disappoint some employers who genuinely qualified but missed the opportunity, the IRS deemed it necessary to curb the overwhelming fraudulent activity plaguing the program.
