On September 14th, the IRS announced that they will stop processing any new Employee Retention Credit (ERC) claims filed until at least the end of the year. This decision comes amid rising concerns about a flood of improper claims, putting honest small business owners at financial risk from scams. Some third-party firms are taking aggressive or improper positions when it comes to determining eligibility for and calculating the credit. These promoters charge large upfront fees or a fee that is contingent on the amount of the refund.

While previously filed ERC claims will still be processed, there will be longer processing times due to more detailed compliance checks. The current processing time for ERC claims will increase from 90 days to 180 days. If a claim requires further review or audit, the processing time will be even longer.

To address the concerns of businesses affected by aggressive promoters, the IRS is developing new initiatives including a settlement program for those who have received improper ERC payments. Additionally, they are finalizing details on a special withdrawal option for businesses that want to withdraw a filed ERC claim that hasn’t yet been processed.

HBE Is Here To Help 

At HBE, we understand the importance of staying informed and ensuring that you have the guidance you need. Our knowledgeable professionals are closely monitoring updates from the IRS and will keep you updated on any changes or further guidance that may arise. If you have any questions or concerns regarding the ERC program, please feel free to reach out to your trusted HBE advisor. We’re here to assist you.