IRS program designed to collect ineligible ERC money

Confusion over employee retention credit rules resulted in a wave of claims filed by ineligible businesses, and now the IRS has launched a program to help those businesses pay back ERC money without harsh penalties and fines.

The IRS said that the new program is open to employers who meet multiple requirements:

  • The business received the ERC for a tax period in which it was not actually qualified
  • The employer is not under criminal investigation, either current or pending
  • The employer is not under an IRS employment tax examination for the same tax period involving the mistaken ERC claim
  • The employer did not receive an ERC disallowance letter mailed by the IRS in December 2023

The special disclosure program allows for the repayment of 80% of the claim received by the business. Installment payment plans are available but are subject to additional penalties and interest.

To apply, an employer must file Form 15434 with the IRS document upload tool. The employer also must provide the names and contact information of any tax advisors or preparers who assisted with the ineligible claim.

The deadline to apply is March 22, 2024.

Click here for additional information on the program and eligibility on the IRS website.

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