The IRS has announced that it will begin processing Employee Retention Credit (ERC) claims submitted prior to February 1, 2024. (IR-2024-203) Previously, the IRS had placed a moratorium on processing any claims submitted after September 13, 2023.
The IRS has also stated that:
- They will prioritize moving the outstanding “low-risk” claims out for payment and the “high-risk” claims out for denial, and will carefully examine the remaining claims;
- They have approved up to 50,000 “low-risk” ERC claims submitted prior to September 14, 2023, and will commence sending out payments on these claims starting in September;
- They have denied 28,000 “high-risk” claims representing over $5 billion in improper claims, but has confirmed that after receiving feedback from taxpayers and tax professionals approximately 10% of the denials issued were issued in error, but that the errors appear to be isolated instances; and
- Some of the denial notices failed to inform taxpayers of their appeals rights (they can request an administrative appeal or appeal directly to the U.S. District Court). The IRS has confirmed that standard appeals rights apply to these denials.
The announcement does not indicate how many backlogged ERC claims the IRS still has to process.
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