04/08/2024

The IRS Is Going After 12,000 Businesses Over Employee Retention Tax Credits

The agency is seeking ways to correct its own oversight mistakes

The Internal Revenue Service (IRS) is making headway in shooting down $1 billion worth of Employee Retention Credits (ERCs) that were wrongfully claimed. The agency intends to recoup funds from more than 12,000 businesses--and that number could climb given that the credit was heavily marketed to small businesses by so-called ERC mills. 

The IRS announced in late March that it has already clawed back hundreds of millions worth of ERCs. Propped up by Congress in March 2020, the credit was designed to incentivize hard-hit employers to keep workers on staff during the pandemic.

Some employers took extra-legal advantage, and the government is getting some of that money back. "The IRS has made important progress in our compliance efforts protecting more than $1 billion in revenue in just six months, but we remain deeply concerned about widespread abuse involving these claims that have harmed small businesses," IRS Commissioner Danny Werfel said in a statement.

Please select this link to read the complete article from Inc.