IRS said efforts are underway to recover funds improperly distributed under the Employee Retention Credit
NEW YORK — The IRS says efforts are underway to recover funds improperly distributed under the Employee Retention Credit.
ERC was designed to help businesses retain employees during pandemic-era shutdowns, but it quickly became a magnet for fraud. Its complex eligibility rules allowed scammers to target small businesses and offer to help them apply for the ERC for a fee, even if they were not eligible.
The IRS announced it received $225 million from the Voluntary Disclosure Program, which ended on March 22nd. The program allows small businesses that believe they received a credit in error to get their money back and keep 20%. This funding comes from over 500 of his taxpayers, and he has another 800 submissions still being processed.
An ongoing program that allows small businesses to withdraw outstanding claims has resulted in 1,800 businesses withdrawing $251 million worth of claims. And finally, the IRS assessed him $572 million in an audit of over 12,000 companies that made over 22,000 false claims.
“We remain deeply concerned about the widespread abuses associated with these claims that have harmed small businesses,” IRS Commissioner Danny Wuerffel said in a statement. “We are encouraged by the results of our efforts to date to support misleading businesses.”
The IRS stopped processing new claims in September, but said it will likely resume processing them this spring. An additional $3 billion in his claims is being reviewed by his IRS criminal investigation.
