

News & Insights
News & Insights
February 2024
By: David T. Potts
The Journal Record
The IRS continues to formulate new ways of reviewing Employee Retention Credit (“ERC”) claims to identify ineligible taxpayers. Many businesses were misled into filing claims for ERC by promoters who often misled or misrepresented eligibility rules. If you claimed and received ERC you were not entitled to, you should consider participating in the Employee Retention Credit Voluntary Disclosure Program (“ERC-VDP”) to correct it. Anyone claiming ERC they are not entitled to, risks detection by the IRS, that could result in substantial penalties and increase the risk of criminal prosecution. Taxpayers have until March 22, 2024, to apply for the ERC-VDP.
The ERC-VDP requires a taxpayer to:
There are several benefits to participating in the ERC-VDP:
Businesses, tax-exempt organizations and government entities are eligible to apply for the ERC-VDP for each tax period that meets all of the following requirements:
The IRS has issued a list of possible warning signs that an ERC claim may be questionable, including:
Taxpayers are strongly advised to review their ERC claims in preparation of increased IRS scrutiny and to determine if they need to participate in the ERC-VDP to reduce IRS risk exposure.