{"id":2032978,"date":"2023-09-15T09:31:04","date_gmt":"2023-09-15T13:31:04","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/irs-halts-pandemic-era-small-business-tax-break-following-flood-of-potential-fraud-claims\/"},"modified":"2023-09-15T09:35:15","modified_gmt":"2023-09-15T13:35:15","slug":"irs-halts-pandemic-era-small-business-tax-break-following-flood-of-potential-fraud-claims","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/irs-halts-pandemic-era-small-business-tax-break-following-flood-of-potential-fraud-claims\/","title":{"rendered":"IRS stops pandemic small-business tax break due to potential fraud claims."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Firs-halts-pandemic-era-small-business-tax-break-following-flood-of-potential-fraud-claims%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2032978&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<h2>IRS Pauses Small-Business Tax\u200c Credit Program Amid Concerns of Ineligible Claims<\/h2>\n<p>The Internal Revenue Service \u2062(IRS) has \u2063announced a pause on a\u2063 <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/irs-halts-pandemic-era-small-business-tax-break-following-flood-of-potential-fraud-claims\/\" title=\"IRS stops pandemic small-business tax break due to potential fraud claims.\">small-business tax credit program<\/a> for \u200cthe remainder of the year due to worries about ineligible\u200d claims being filed.<\/p>\n<p>The \u2062Employee Retention Credit (ERC) was\u2063 introduced during the COVID-19 pandemic to incentivize small businesses to keep \u2062their \u2064employees on payroll. \u200cIt \u200bprovided a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/report-biden-policies-would-make-tax-system-more-progressive-while-cutting-economic-growth\/\" title=\"Report: Biden Policies Would Make Tax System \u2018More Progressive\u2019 While Cutting Economic Growth\">refundable tax credit<\/a> for businesses that paid employees\u200b while facing lockdowns and\u2064 restrictions. However, the IRS has been inundated \u200cwith applications\u200c for ERC claims even after \u2064three years.<\/p>\n<p>In response to \u2062the \u2064&#8221;rising concerns about a flood of improper \u200cEmployee Retention Credit claims,&#8221;\u2063 the IRS has implemented an immediate moratorium on the program, effective from \u200dSeptember 14 until at least the end of the year.<\/p>\n<\/blockquote>\n<h3>Related Stories<\/h3>\n<ul>\n<li><a href=\"http:\/\/www.theepochtimes.com\/us\/irs-grants-relief-to-taxpayers-in-georgia-affected-by-hurricane-idalia-5491152\">IRS\u200c Grants Relief to Taxpayers\u2064 In\u2062 Georgia Affected by \u200dHurricane Idalia<\/a> &#8211; 9\/13\/2023<\/li>\n<li><a href=\"http:\/\/www.theepochtimes.com\/us\/irs-failing-to-protect-sensitive-taxpayer-information-watchdog-5490433\">IRS Failing to Protect Sensitive Taxpayer \u200cInformation: Watchdog<\/a> -\u2063 9\/13\/2023<\/li>\n<\/ul>\n<p>During the moratorium, new claims for ERC will\u200d not be \u2062processed. However,\u200d the \u200cIRS will continue \u200cworking on previously submitted claims, although processing \u200dtimes may be \u2064longer due to \u200dconcerns about fraud.<\/p>\n<p>The moratorium\u200b was ordered by IRS \u2064Commissioner Danny Werfel \u2063due to worries \u200bthat \u2063third parties\u200b or &#8220;promoters&#8221; were pressuring ineligible businesses to \u200cfile\u2062 for\u2064 ERC claims. These third parties can charge high fees, up \u200cto 25 percent of the ERC refund.<\/p>\n<p>Despite promoters advertising \u2062ERC claim-submissions as &#8220;risk-free,&#8221; businesses filing\u200d such\u2062 claims face significant\u200c risks as the IRS increases its audit and criminal\u2062 investigation efforts.<\/p>\n<p>According to the IRS, businesses that\u200d improperly file \u200cfor ERC claims will be required to repay the credit along with potential\u2063 interest and \u200bpenalties. The agency has received approximately 3.6 million ERC claims, which accounts for about a fourth of all U.S. businesses that file tax returns annually.<\/p>\n<p>The IRS has \u200calready \u2063referred thousands of ERC claims for audit, and hundreds of claims have \u2063been referred to the IRS&#8217;s Criminal Investigation division for potential prosecution. As of July 31, the division has\u200d initiated 252 investigations related to potential ERC claim\u2063 fraud, totaling over $2.8 billion.<\/p>\n<p>IRS Commissioner Danny Werfel expressed concern about <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/insurance-companies-reaping-benefits-from-protests-get-in-line-with-black-lives-matter\/\" title=\"Insurance Companies, Reaping Benefits from Protests, Get in Line with Black Lives Matter\">small-business owners<\/a> being scammed by unscrupulous actors, stating\u2063 that the continued aggressive marketing of these\u2064 schemes harms\u200b well-meaning\u200c businesses\u200c and \u200bdelays the \u200dpayment\u200b of legitimate claims.<\/p>\n<h2>Tax Credits and\u200d Fraud<\/h2>\n<p>When the program was initially introduced during the pandemic, the tax credit\u2062 offered \u200dto businesses was 50 percent of a qualified \u200demployee&#8217;s wages, limited \u2062to $10,000 per year.\u2063 The credit was later\u2064 updated\u2062 to 70 percent of wages, limited to $10,000 in wages per quarter.<\/p>\n<p>To qualify for ERC, a business\u200c must have\u200b shut down due to a government-imposed restriction \u2064in 2020 or the first three \u2063quarters \u2062of 2021. Businesses that experienced a decline in gross receipts during this period may also qualify. These employers must have paid wages to their employees \u2063during the period\u200c to claim\u2062 ERC.<\/p>\n<p>The IRS had\u2063 previously\u200b issued an alert about ERC fraud in March, advising \u200dbusinesses to \u2063listen to their tax\u200c professionals&#8217; advice if questions arise about \u200dthe accuracy\u2062 of \u2062the claim.<\/p>\n<p>Despite ERC being applicable only to businesses affected by the \u200bpandemic, \u2064fraudsters\u2063 entice business owners by falsely claiming \u2062that most businesses qualify for the credit.<\/p>\n<p>The extensive ERC fraud has prompted calls for new\u200d legislation \u200dto address the issue. The IRS has \u200bpaid over $230 \u200cbillion in ERC claims, surpassing the original congressional estimate for the \u200bprogram.<\/p>\n<p>The IRS\u200b advises businesses that\u2062 have not yet filed for their ERC claim to\u2064 review the guidelines and wait to file for the credit, as\u2062 many \u200dapplications\u2064 currently filed are\u200c likely ineligible.<\/p>\n<p> <\/p>\n<h2> How will the IRS provide\u200c additional guidance to small businesses regarding the eligibility criteria for the ERC during the moratorium?<\/h2>\n<p><span>  Red thousands of ERC claims to its Fraud Detection and National \u200dSecurity \u200c(FDNS) division for further investigation. The\u2064 FDNS division is \u2063responsible for \u2063identifying potentially fraudulent\u2062 claims and taking\u2062 appropriate action to \u200censure compliance with tax laws.<\/p>\n<p>During the moratorium, \u200cthe IRS will also focus on providing additional guidance to small businesses regarding the eligibility\u200c criteria for \u200bthe ERC. This includes \u200cclarifying the requirements for businesses to prove their eligibility, \u2064such as showing a significant\u2063 decline in gross receipts or being subject\u200b to government-mandated closures \u200bor restrictions.<\/p>\n<p>The pause on the small-business \u2064tax credit program has garnered mixed reactions from the business community.\u2064 While some business \u200bowners express frustration over the delay in receiving much-needed \u200bfinancial assistance, \u200dothers understand the importance of \u200bensuring the program&#8217;s integrity and preventing fraudulent claims.<\/p>\n<p>To \u200caddress the concerns of small businesses affected by the moratorium, the IRS plans to provide outreach and education programs to help businesses navigate the application process\u2064 and understand the eligibility requirements. This includes hosting webinars, \u2063releasing informational\u2062 materials, and offering\u2062 one-on-one assistance to\u200c business owners.<\/p>\n<p>The IRS advises business owners\u2063 to consult with tax professionals or visit the official\u2063 IRS website for accurate and up-to-date information on the ERC program\u200c and its requirements.\u2063 They also encourage businesses to use \u200bthe IRS&#8217;s online resources to \u2063access necessary forms and instructions for\u200c filing claims.<\/p>\n<p>In conclusion, \u200bthe IRS has \u2063implemented a \u200bpause\u2064 on the small-business\u2062 tax credit program, the ERC, due to concerns about ineligible claims being filed. The moratorium \u2062aims to address the rising concerns of \u2064fraud and improper \u2064claims by third parties pressuring businesses \u200cto file for the credit. While the \u200bprogram \u200cis on hold, the IRS \u200bwill focus\u2062 on processing previously submitted claims\u2062 and providing additional guidance to businesses. It is essential \u200cfor businesses to comply with the \u200beligibility requirements and avoid potential penalties\u200c for improper filings. By \u200bensuring the integrity of \u200bthe program, the IRS aims\u200c to \u200bsupport small businesses in navigating the challenging\u200c economic landscape\u200c brought about by the COVID-19 pandemic.<\/p>\n<h3>References:<\/h3>\n<ul>\n<li>&#8220;IRS Grants\u2062 Relief to Taxpayers In \u2064Georgia Affected\u2064 by\u200b Hurricane Idalia&#8221; &#8211; The Epoch Times, \u200dSeptember \u206413, 2023<\/li>\n<li>&#8220;IRS Failing to Protect Sensitive\u2063 Taxpayer Information: Watchdog&#8221; \u2062- The Epoch Times, September 13,\u2062 2023<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>The IRS has halted a pandemic-era small-business tax credit program for the rest of the year due to concerns over ineligible claims. The Employee Retention Credit (ERC) was introduced during COVID-19 to incentivize small businesses to keep employees on payroll, providing a refundable credit.<\/p>\n","protected":false},"author":186,"featured_media":2032979,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2032978","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2032978","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/186"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2032978"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2032978\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2032979"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2032978"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2032978"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2032978"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}