New Employee Retention Credit (ERC) Voluntary Disclosure Program
The ERC is a refundable tax credit for businesses that continued paying employees during the pandemic while their business operations were either fully or partially suspended due to a government order, or for businesses that had a significant decline in gross receipts during the eligibility periods.
IRS has launched a new Voluntary Disclosure Program
to help employers who want to pay back the money they received after filing ERC claims in error. Interested employers must apply to the ERC Voluntary Disclosure Program by March 22, 2024. Those accepted into the program will only need to repay 80 percent of the credit they received. Employers who are unable to repay the required 80 percent of the credit may be considered for an installment agreement on a case-by-case basis.
To qualify for the ERC Voluntary Disclosure Program, employers must provide IRS with the names, addresses and telephone numbers of any advisors or tax preparers who advised or assisted them with their claim, and details about the services provided.
In addition to the 20,000 ERC denial letters IRS sent earlier this month, IRS is sending another 20,000 letters with proposed tax adjustments to recapture any erroneously claimed credits. IRS continues to urge employers with pending ERC claims to consider its ERC withdrawal program
, which allows employers to remove a pending ERC claim with no interest or penalty.