R&D Tax Credit News

In recent months, the IRS has announced several measures it is taking to protect businesses from scams tied to the Employee Retention Credit (ERC). In September, the agency announced a moratorium on processing new ERC claims through the end of 2023, and in mid-October it has announced details of a special withdrawal process for companies that filed an ERC claim but have concerns about its legitimacy.

The special withdraw process is in place for companies that have filed an ERC claim but have yet to receive refunds.  Claims that are withdrawn will be treated as if they were never filed. The IRS will not impose penalties or interest. According to IRS Commissioner Danny Werfel, “The IRS is committed to helping small businesses and others caught up in this onslaught of Employee Retention Credit marketing. The aggressive marketing of these schemes has harmed well-meaning businesses and organizations, and some are having second thoughts about their claims. We want to give these taxpayers a way out. The withdrawal option allows employers with pending claims to avoid future problems, and we encourage them to closely review the withdrawal option and the requirements. We continue to urge taxpayers to consult with a trusted tax professional rather than a marketing company about this complex tax credit.”

For further information on who is eligible to withdraw an ERC claim, and steps to withdraw an ERC claim, taxpayers can follow the special instructions at IRS.gov/withdrawmyerc.

In addition, Fact Sheet 2023-24 contains more details about the ERC withdrawal process.

Tax professionals and others can register for a Nov. 2 IRS webinar, Employee Retention Credit: Latest information on the moratorium and options for withdrawing or correcting previously filed claims. Those who can’t attend can view a recording later.