IRS Announces New Relief Program for Erroneous ERC Claims

IRS announces new Voluntary Disclosure Program for paying back erroneous ERC claims – Applications due by March 22, 2024

In the last few months, the IRS has sent 20,000 letters disallowing improper ERC claims. In a recent announcement, the Internal Revenue Service (IRS) has unveiled a new Voluntary Disclosure Program aimed at businesses and organizations that have received or claimed erroneous Employee Retention Credits (ERC). With applications due by March 22, 2024, this program offers an opportunity for affected entities to rectify their claims and avoid potential penalties. Here's what you need to know about this development and how it may impact your business.

• Application Deadline: The deadline for submitting applications for the Voluntary Disclosure Program is March 22, 2024. Businesses that believe they have claimed ERC in error should act promptly to assess their eligibility and submit their applications before the deadline.

• Eligibility Criteria: To participate in the program, businesses must meet certain eligibility criteria outlined by the IRS. These criteria may include specific conditions related to the erroneous claims, the timeframe of the claims, and other relevant factors.

• Benefits of Participation: By participating in the Voluntary Disclosure Program, businesses can avoid certain penalties that may apply to erroneous claims. This can help businesses mitigate potential financial consequences and demonstrate good faith in rectifying their tax reporting errors.

• Process for Participation: The IRS has provided guidance on the process for participating in the program, including the steps businesses need to take to submit their applications and make the necessary payments. It is essential for businesses to follow the IRS guidelines carefully to ensure compliance with the program requirements.

Do you want additional information for your business or your clients, check out the IRS link here.