September 19, 2023

Understanding the Latest IRS Statement on the Employee Retention Credit (ERC)

September 19, 2023 – In a move to protect honest small business owners from scams and aggressive marketing tactics, the Internal Revenue Service (IRS) has declared an immediate moratorium on processing new claims for the Employee Retention Credit (ERC) through at least the end of the year, starting September 14, 2023. The decision comes as the IRS, along with tax professionals and media reports, has expressed mounting concerns about the rising number of potentially ineligible ERC claims, putting businesses at financial risk.

The IRS Commissioner, Danny Werfel, ordered the moratorium in response to the growing evidence of questionable claims being submitted for the pandemic-era relief program. These claims have not only delayed the payment of legitimate ERC claims but have also harmed businesses and the tax system as a whole. During this moratorium period, the IRS will focus on enhancing safeguards to prevent future abuse of the ERC program and protect businesses from predatory tactics.

Raj Gill, Vice President at Hiring Incentives, stated, “We appreciate the efforts that the IRS is going through to safeguard companies from scams. At Hiring Incentives, we take immense pride in our business processes. We thoroughly vet and ensure every client meets qualifications before they file. We’ve even turned clients away that don’t meet the qualifications for the program. In addition, our commitment to compliance means providing detailed worksheets on all evaluations and offering unwavering support to our clients in the event of an audit.”

Key points of the moratorium:

  • Processing Delays: New ERC claims filed after September 14, 2023, will not be processed until at least the end of 2023. Existing ERC claims will undergo enhanced scrutiny and may experience processing times extending up to 180 days or longer.
  • Enhanced Compliance Reviews: Stricter compliance reviews will be implemented during this period, and additional documentation may be requested from claimants to ensure legitimacy.
  • Payouts Continue: Payments for legitimate ERC claims will continue during the moratorium but at a slower pace due to detailed compliance reviews.
  • Protection Against Fraud: The enhanced compliance review of existing claims is essential to protect against fraud and to prevent businesses from facing penalties or interest payments associated with improper claims.

To help businesses navigate ERC eligibility and understand the credit better, the IRS has published guidance, FAQs, and a new question and answer guide.

The IRS is also developing initiatives to assist businesses that have fallen victim to aggressive promoters, including a settlement program for improper ERC payments. Furthermore, a special withdrawal option is being finalized for those who have filed ERC claims that have not been processed, allowing them to avoid potential repayment issues and promoter contingency fees.

In light of these developments, we at Hiring Incentives, a UC Alternative company, want to offer reassurance to the nursing home and long-term care community regarding our unwavering commitment to integrity and due diligence. With over two decades of dedicated service to businesses, we have become experts in understanding the nuances of nursing homes and long-term care facilities and how the ERC applies to them. Our longstanding presence in this sector is a testament to the trust and credibility we’ve fostered over the years. Distinct from many newcomers in the field, we immerse ourselves in every case, conducting thorough analyses before determining eligibility.

This rigorous approach ensures that only the genuinely eligible facilities benefit from the ERC, protecting numerous others from the potential pitfalls of non-compliance. Moreover, should the need arise, we stand shoulder to shoulder with our clients during audits, guiding them through each step. Proudly, to date, there have been no findings on any audits conducted on our clients. When you partner with Hiring Incentives, you’re not merely opting for a service provider, but a seasoned partner dedicated to navigating the intricacies of the ERC with utmost precision and dedication. Choose us for unparalleled expertise, a legacy of trust, and a steadfast commitment to ensuring your facility’s financial security.

About the Employee Retention Credit (ERC): The ERC is a refundable tax credit designed to assist businesses that continued paying employees during the COVID-19 pandemic while facing operational challenges. It is a complex credit with specific eligibility requirements. For more information on the ERC, visit IRS.gov/erc