IRS Takes Action: $7 Billion in Fraudulent Claims Under Investigation, $5 Billion in Improper Payments Prevented, and $867,000 in Low-Risk ERC Claims to be Paid Out in September!

IRS to Accelerate Payments for 50,000 Low-Risk ERC Claims Starting in September

Agency Resumes Processing of ERC Claims and Intensifies Fraud Investigations

According to the IRS, the IRS is taking strong actions to manage the Employee Retention Credit (ERC) program by speeding up payments for valid claims and tackling fraudulent ones. The agency plans to begin processing payments for 50,000 low-risk ERC claims starting in September. This comes after the IRS sent out 28,000 disallowance letters to businesses with high-risk claims, which could help prevent up to $5 billion in improper payments. The IRS is working to ensure that genuine claims are paid out while also increasing audits and investigations into potential fraud.

To handle the large number of ERC claims and improve accuracy, the IRS had paused processing new claims submitted after September 14, 2023. The agency is now resuming work on claims submitted between September 14, 2023, and January 31, 2024 focusing on those with the highest and lowest risks. IRS Commissioner Danny Werfel noted that the ERC program is very complex and careful management is needed to prevent fraud and ensure that eligible businesses get their funds.

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IRS Takes Action: $7 Billion in Fraudulent Claims Under Investigation, $5 Billion in Improper Payments Prevented, and $867,000 in Low-Risk ERC Claims to be Paid Out in September! (PHOTO: Don’t Mess With Taxes)

Alongside speeding up payments the IRS is also focusing on enforcement actions. More than 460 criminal cases have been opened against fraudulent claims amounting to nearly $7 billion. The IRS is investigating those who promoted false ERC claims to businesses. With many claims under audit and ongoing investigations the IRS is dedicated to protecting the ERC program’s integrity and making sure that legitimate claims are processed quickly and accurately.

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