To ensure the integrity of the Employee Retention Credit (ERC) program, the Internal Revenue Service (IRS) is initiating a comprehensive crackdown on erroneous claims. More than 20,000 disallowance letters are being sent out to taxpayers with disallowed ERC claims. This action targets entities that are either non-existent during the eligible period or without paid employees as part of the effort to curb improper ERC payments.
The IRS’s decision to intensify scrutiny on ERC claims comes in response to misleading marketing campaigns that have targeted small businesses and other organizations. The agency’s current initiative includes a special withdrawal program for those with pending claims who now realize their tax returns may have been inaccurately filed.
