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IRS Disallowing 20,000 Employee Retention Credit (ERC) Claims

Article Highlights:

  • Initial ERC Claim Disallowance Letters Issued

  • Dubious TV Promotions

  • Claim Withdrawal Process

  •  How These Letters Help Taxpayers

In its ongoing effort to combat questionable Employee Retention Credit (ERC) claims, the IRS has sent more than 20,000 letters advising taxpayers that the agency is disallowing their claims. This initial batch of letters is going to businesses that did not exist or did not have paid employees during the eligibility period (March 13, 2020, and December 31, 2021) to claim the claim the credit.

 We previously posted a September 29th article cautioning business owners to be cautious of the aggressive marketing on TV related to ERC claims which was followed by a November 9th article that included a procedure for those who made ineligible clams to withdraw the claims and avoid future problems with the IRS.

These disallowance letters have identified ineligible claims before they're paid, and:

  • Help ineligible taxpayers avoid audits, repayment, penalties, and interest, as well as

  • Protect taxpayers by preventing an incorrect refund from going to an ERC promoter.

This is only part of the IRS’s enforcement activities, and the IRS plans additional letters in the future. The IRS continues to warn taxpayers to use extreme caution before applying for the ERC as aggressive maneuvers continue by marketers and scammers. However, those who willfully filed a fraudulent claim, or those who assisted or conspired in such conduct, should be aware of potential criminal investigation and prosecution.

Please contact this office with questions or assistance.

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Our Mission: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we are on a mission to redefine the tax experience for individuals and small businesses. With a focus on personalized service, strategic planning, and expert guidance, we aim to empower our clients to succeed financially with confidence and ease.

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Why Choose Us?: What sets us apart from other New Jersey tax firms is our commitment to excellence and innovation in the field of taxation. We don't just prepare tax returns; we provide strategic insights, proactive planning, and actionable advice to help our clients achieve their financial goals. With a team of two CPAs, an EA, and an ERO, we have the expertise and resources to deliver exceptional service and results.

Your Success is Our Priority: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we measure our success by the success of our clients. We are dedicated to building long-lasting relationships, providing unparalleled service, and helping our clients thrive in today's ever-changing tax landscape.

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