IRS Suspends Processing New ERC Claims

September 20, 2023

We wanted to inform you that on September 14, 2023, the IRS issued two important announcements, IR-2023-169 and IR-2023-170. These releases announce an immediate suspension of the processing of new Employee Retention Credit (ERC) claims. This decision has been prompted by a surge in suspicious and potentially fraudulent claims being submitted by aggressive promoters.

Previously, the IRS had cautioned businesses about the risks associated with aggressive promoters who encourage improper ERC claims, now, to combat this issue the IRS is taking proactive steps temporarily halting the processing of new ERC claims until sometime in 2024. During the pause, the IRS will continue to process claims that have already been received. However, due to increased fraud concerns, processing times are expected to be significantly longer. Taxpayers may also be requested to provide additional documentation to verify the legitimacy of their claims before processing.

For those who have already submitted ERC claims and have received ERC refund checks, please be aware that the IRS is intensifying its review of these claims for compliance. There is a higher likelihood of audits for these cases. Businesses found to have received improper ERC payments will be required to repay the amounts received and may also face penalties and interest charges. To assist honest small business owners who were scammed by aggressive promoters, the IRS is developing new initiatives, including the introduction of a settlement program for those who received improper ERC payments.

During this temporary pause, for those few clients who have ERC calculations still in process with our office, we want to assure you that our dedicated team will continue to work diligently to assist in completing these projects and submitting these claims as applicable. This way your claim will be in queue for processing when the IRS lifts the pause.

If you have already submitted ERC claims and are waiting for payments, you can expect further delays in processing times. We will continue to relay to you any announcements from the IRS regarding the processing of ERC claims.

If you have any questions or concerns, please do not hesitate to reach out to your tax professional.

Gatto, Pope & Walwick, LLP
Certified Public Accountants