• Sun. Apr 21st, 2024

IRS Takes Steps to Recover Funds for Employee Retention Credit Amidst Fraudulent Claims

BySamantha Nguyen

Apr 2, 2024
IRS recovers funds from businesses awarded under fraudulent COVID-era tax credit program

Amidst reports of fraud, the IRS has made significant strides in recovering funds that were improperly distributed under the Employee Retention Credit (ERC). This credit was designed to aid businesses in retaining employees during pandemic-related shutdowns. However, its complex eligibility rules unfortunately made it a prime target for fraudsters.

The IRS received $225 million through a voluntary disclosure program that allowed small businesses who believed they received the credit in error to return the money. Over 500 taxpayers participated in this program, with 800 submissions still being processed. Additionally, an ongoing program allowing businesses to withdraw unprocessed claims has resulted in 1,800 businesses withdrawing $251 million.

Furthermore, the IRS conducted audits on over 12,000 businesses that filed more than 22,000 improper claims, resulting in $572 million being assessed. IRS Commissioner Danny Werfel expressed concern over the widespread abuse of these claims and emphasized the IRS’s efforts to assist misled businesses.

While processing of new claims stopped in September, the IRS anticipates resuming operations in spring. The IRS Criminal Investigation is currently reviewing an additional $3 billion in claims as part of their ongoing efforts to recover funds that were fraudulently obtained and prevent further abuse of ERC program.

By Samantha Nguyen

As a content writer at newsqwe.com, I am passionate about crafting engaging and informative articles that captivate our audience. With a background in journalism and a keen eye for detail, I strive to deliver content that is not only well-researched but also adds value to our readers' lives. From breaking news stories to in-depth features, I take pride in my ability to tell compelling stories that resonate with our diverse audience. When I'm not typing away at my keyboard, you can find me exploring new cafes, practicing yoga, or getting lost in a good book. I am thrilled to be a part of the newsqwe.com team and look forward to sharing my love for writing with all of our readers.

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