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The IRS has announced it will reject billions of dollars in improperly claimed employee retention tax credits due to widespread fraud and errors discovered during a recent review.
IRS Announces Rejection of Improper Employee Retention Tax Credits, Promises Progress on Legitimate Claims
The IRS has announced it will reject billions of dollars in improperly claimed employee retention tax credits following a thorough review initiated last September. Over one million claims were scrutinized revealing widespread fraud and errors. However, legitimate businesses awaiting payments can expect closer progress in receiving their due, according to the report of INC.
The completion of the IRS review offers hope to business owners facing lengthy delays, as the agency plans to prioritize processing valid claims. The moratorium on new claims since September prompted by suspected fraud has exacerbated financial strains for many entrepreneurs and their advisors.
(photo: Forbes)
IRS Addresses Challenges with Employee Retention Credit Amid Fraud Concerns, Focuses on Legitimate Claims Processing
Initially aimed at encouraging employee retention during the pandemic and the Employee Retention Credit (ERC) attracted significant fraudulent activity, forcing the IRS to halt new claims. Despite these challenges, the IRS remains committed to sorting through claims focusing on denying improper ones while expediting payments for legitimate businesses.
Despite processing over $2.2 billion in claims and denying more than $1 billion in erroneous ones, the IRS acknowledges the delays have affected many small businesses awaiting relief. As they aim to speed up legitimate claims processing this summer and the IRS stresses careful scrutiny to uphold program integrity.
