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IRS Freezes New ERC Claims

The Internal Revenue Service has imposed a moratorium on processing new claims for the improper Employee Retention Credit. The freeze, in place through at least the end of the year, was triggered by because of possible fraud in the flood of claims.

The IRS noted the move was triggered by concerns from inside the agency and tax professionals, along with news reports, that a substantial number of new claims are ineligible. The announcement noticed these claims are “increasingly putting businesses at financial risk by being pressured and scammed by aggressive promoters and marketing.

Claims received before the freeze will continue to be processed, but concerns over fraud will lengthen processing times from a goal of processing these from 90 days to 180 days, which will be much longer if the claim faces review or audit. Additional documentation may be required for such claims.

 The IRS had already shifted its focus to review claims and now notes hundreds of criminal cases are being worked, and thousands of ERC claims have been referred for audit.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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