The IRS recently
released an update on the next stages of its Employee Retention Credit (ERC) work. The update notes that the agency will be starting a new round of processing what it deems lower-risk claims to help eligible taxpayers. For those with no eligibility warning signs that were received prior to the last fall’s moratorium, it will begin "judiciously processing" more of these claims. The IRS anticipates some of the first payments in this group will go out later this summer. But it also emphasized these will go out at a dramatically slower pace than payments that went out during the pandemic period given the need for increased scrutiny.
It is important to note that the IRS made clear that generally the oldest claims will be worked first, and no claims submitted during the moratorium period will be processed at this time. In light of the large inventory and the results of the ERC review, the IRS will keep the processing moratorium in place on ERC claims submitted after Sept. 14, 2023. It will use this period to gather additional feedback from partners, including Congress and others, on the future course of ERC.
The IRS also cautioned taxpayers who filed ERC claims that the process will take time, and the agency warned that processing speeds will not return to levels that occurred last summer. Taxpayers with claims do not need to take any action at this point, and they should await further notification from the IRS. The agency emphasized those with ERC claims should not call IRS toll-free lines because additional information is generally not available on these claims as processing work continues.
Finally, the IRS noted to be careful of promoters using this recent announcement as a springboard to attract more clients to file ERC claims. Some promoters told taxpayers every employer qualifies for ERC. The IRS and the tax professional community emphasize that this is not true. Eligibility depends on specific facts and circumstances. More details on IRS resources around ERC eligibility can be found
here.