On September 14, the IRS announced a moratorium for the rest of 2023 whereby employers may not submit Employee Retention Credits (ERC) due to widespread fraudulent requests.  Due to the ERC’s complexity, the IRS provides a checklist for employers and tax advisors to help navigate the tax credit.

In the latest news, the IRS is providing employers a way to withdraw an ERC claim if they’re concerned they may have been duped into filing a potentially fraudulent ERC and want to start over with their trusted tax advisor.

Tax advisors and employers potentially impacted by this may register for a November 2 webinar.

The IRS explains the ERC withdrawal process below:

Employers can use the ERC claim withdrawal process if all of the following apply:

  • They made the claim on an adjusted employment return (Forms 941-X, 943-X, 944-X, CT-1X).
  • They filed the adjusted return only to claim the ERC, and they made no other adjustments.
  • They want to withdraw the entire amount of their ERC claim.
  • The IRS has not paid their claim, or the IRS has paid the claim, but they haven’t cashed or deposited the refund check.

Taxpayers who are not eligible to use the withdrawal process can reduce or eliminate their ERC claim by filing an amended return.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.