12/14/2024

Legislators Pressure IRS to Resolve ERTC Backlog

Many nonprofits remain hopeful they'll receive the funding they were promised

Last week, Congressional Democrats from New York sent a letter expressing concerns about how long it’s taking the IRS to process outstanding Employee Retention Tax Credit (ERTC) claims. The ERTC, created by the CARES Act in March 2020, was a lifeline to small businesses and nonprofit groups struggling to keep their employees on their payrolls during the COVID-19 pandemic.

Last year, IRS Commissioner Danny Werfel ordered the agency to immediately stop processing new ERTC claims due to a "surge of questionable claims" that he attributed to exploitative marketing pushing the credit as a lifeline. About 1.4 million ERTC claims remain unpaid, although the IRS said many of them have been improperly filed.

What they’re saying: “We commend the agency for its vigilance and actions to prevent bad actors from abusing this program. These recent announcements are a step in the right direction to protect against improper claims and provide relief for legitimate businesses,” the New York delegation wrote. “However, the slow review process and the moratorium have caused significant delays and hardship for legitimate small businesses who have waited years for their credits.”

The New York delegation letter specifically asks the IRS to expedite processing of low-risk ERTC claims and provide claimants with an avenue to check on the status of their ERTC claims.

This article was provided to OSAP by ASAE's Power of Associations and Inroads.