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06 / 21 / 24

IRS Employee Retention Credit Update: June 2024

As previously discussed here on the Bryson Blog, the IRS Employee Retention Credit has been subjected to a multitude of scrutiny and changes over the last several months in response to the suspected misuse of this tax credit.  The IRS has been working to analyze data on pending ERC claims for the last several months. 

IRS Commissioner Danny Werfel now shares that the IRS has confirmed widespread concerns about improper claims, and they plan to now use the information they’ve discovered to deny billions of dollars in clearly improper claims while also beginning additional work to issue claims without any red flags.  He further asked for Taxpayer patience as they work through this process.

In a news release published yesterday – June 20, 2024, the IRS says that it plans to deny tens of thousands of improper “high-risk” claims, while beginning to process lower-risk claims to help those Taxpayers who are truly eligible to claim this tax credit.  Here’s a breakdown on how the IRS is categorizing pending ERC claims:

  • 10-20% of pending claims are “High Risk” – they show clear signs of being erroneous. The IRS plans to deny these in the coming weeks.
  • 60-70% of claims show an “Unacceptable Level of Risk” – the IRS plans to conduct an additional analysis on these to gather more information to help resolve valid claims and protect against improper claims.
  • 10-20% of pending ERC claims are deemed “Low Risk”, and the IRS plans to process these claims accordingly, with some of the first payments to go out later this Summer (though at a much slower pace than ERC claims were paid initially).

The IRS plans to work on oldest claims first, with no claims submitted during the moratorium period (September 2023 to present) to be processed at this time. 

According to the IRS, Taxpayers with pending IRS Employee Retention Credit Claims do not need to take any action at this point and has advised that calling the IRS to inquire on the status of pending claims will not help to expedite their processing. 

Ready to take a 2nd look at your pending IRS Employee Retention Credit claims to ensure that you are eligible for these credits?  Contacted by the IRS with a denial of pending ERC claims or with a letter requesting additional information?  Bryson Law Firm, LLC can help – contact our office today to schedule a free, initial consultation with your local Tax Resolution law firm.