By: Nick J. Richards. Esq. and Consultant Ben Gelt*
Taxpayers should note that the Internal Revenue Service (IRS) has announced a second Employee Retention Credit (ERC) Voluntary Disclosure Program, which will run until November 22, 2024. The ERC is a refundable tax credit for certain businesses that had employees and were affected by the COVID-19 pandemic.
For businesses that tapped into the ERC program, this is an important opportunity to make repayments on an interest-free and penalty-free basis.
This new program only applies to ERC claims for the 2021 tax year and does not cover credits for the 2020 year.
ERC has been a popular tool for businesses of all stripes to recover from the COVID-19 downturn and increase in costs. However, taxpayers should be advised that many businesses awarded credits were not properly qualified. The result is that many taxpayers received a credit when they should not have, and others received too large of a credit – these taxpayers face the threat of significant fines or penalties from the IRS.
This second round of the IRS ERC voluntary disclosure program may be a final chance for taxpayers to remedy issues pertaining to their ERC. To qualify for the program, employers must supply the IRS with the names, addresses, and contact information of all advisors and preparers who assisted with their claims along with details of services provided.
The claim withdrawal program is also still open for those businesses that still have pending claims.
Just as the ERC program itself was complex and often required assistance, voluntary disclosure will in many cases be complex and benefit from professional support. Greenspoon Marder is here to offer the help needed to effectively navigate all ERC-related issues and tax matters generally.
*Not an attorney
