A word of caution to those employers that claimed the Employee Retention Tax Credit | Law
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Although the COVID-19 pandemic finally appears to be in our rearview mirror, businesses that took advantage of the numerous financial relief programs made available by the federal government in 2020 and 2021 are still grappling with the many headaches that came attached to government money.
The most recent headache many businesses unfortunately will encounter is the Internal Revenue Service’s announcement, made on September 14, 2023, that it is suspending the processing of Employee Retention Tax Credit (ERTC) claims through at least the end of the year. The move comes amid concern that a substantial share of taxpayers claiming the ERTC are not eligible for the credit and instead have fallen victim to aggressive “promoters” who “wildly misrepresent[ ] and exaggerate[e]” who is qualified for the ERTC.
The ERTC, established in the CARES Act of 2020 and modified by subsequent acts of Congress through 2021, was perhaps the most significant financial relief available to the largest number of US businesses arising from the COVID-era stimulus packages. The dollars involved are astronomical, as eligible employers can get up to $26,000 per employee, resulting in billions of dollars of credits being claimed by US taxpayers. As a result, the ERC attracted non-lawyer and non-accounting “promoters,” who advertised (and continue to advertise)...
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