In a news release (IR-2023-169), the Internal Revenue Service (IRS) announced it will be  temporarily stopping the processing of new Employee Retention Tax Credit (ERC) claims due to an increasing amount of fraudulent filings as many businesses are being coerced by ERC pop up scammers.

According to the IRS:

  • Current filings will continue to be processed, but the IRS expects processing times will lengthen this could be as much as an additional 6 months due to the increased scrutiny.
  • The processing moratorium on new claims will last at least through the end of 2023.

The IRS stated it will apply “enhanced compliance reviews” on claims going forward. According to the IRS, it has already initiated investigations involving more than $2.8 billion of potentially fraudulent ERC claims.

The IRS announced a repayment settlement program for businesses who have been victim to aggressive ERC promoters and a special withdrawal option for claims that businesses discover to be improper. Businesses are encouraged to wait for future IRS guidance and apply for the program once it becomes available.

Despite the temporary stoppage on processing of new filings, KT’s ERC team will continue to work through claims and be available to answer questions.