Current:Home > NewsIRS will pause taking claims for pandemic-era tax credit due to an influx of fraudulent claims-LoTradeCoin
IRS will pause taking claims for pandemic-era tax credit due to an influx of fraudulent claims
View Date:2024-12-23 21:08:59
The Internal Revenue Service is pausing accepting claims for a pandemic-era tax credit until 2024 due to rising concerns that an influx of applications are fraudulent.
The tax credit, called the Employee Retention Credit, was designed help small businesses keep paying their employees during the height of the pandemic if they were fully or partly suspended from operating. The credit ended on Oct. 1, 2021, but businesses could still apply retroactively by filing an amended payroll tax return.
A growing number of questionable claims are coming from small businesses who may or may not be aware that they aren’t eligible. Because of its complex eligibility rules, the credit quickly became a magnet for scammers that targeted small businesses, offering them help to apply for the ERC for a fee — even if it wasn’t clear that they qualified. The credit isn’t offered to individuals, for example.
“The IRS is increasingly alarmed about honest small business owners being scammed by unscrupulous actors, and we could no longer tolerate growing evidence of questionable claims pouring in,” IRS Commissioner Danny Werfel said. “The further we get from the pandemic, the further we see the good intentions of this important program abused.”
The IRS has received 3.6 million claims for the credit over the course of the program. It began increasing scrutiny of the claims in July. It said Thursday hundreds of criminal cases have been started and thousands of ERC claims have been referred for audit.
Because of the increased scrutiny, there will be a longer wait time for claims already submitted, from 90 days to 180 days, and longer if the claim needs a review or audit. And the IRS is adding a way for small businesses to withdraw their claim if they no longer think they’re eligible. About 600,000 claims are pending.
The government’s programs to help small businesses during the pandemic have long been a target for fraudsters. It’s suspected that $200 billion may have been stolen from two other pandemic-era programs, the Paycheck Protection and COVID-19 Economic Injury Disaster Loan programs.
Small business owners who may want to check whether they’re actually eligible for the credit can check resources on the IRS website including an eligibility checklist.
veryGood! (16714)
Related
- Maine dams face an uncertain future
- Will it take a high-profile athlete being shot and killed to make us care? | Opinion
- 2 former Didion Milling officials sentenced to 2 years in Wisconsin corn plant blast
- Oklahoma radio station now playing Beyoncé's new country song after outcry
- Pie, meet donuts: Krispy Kreme releases Thanksgiving pie flavor ahead of holidays
- NYC man caught at border with Burmese pythons in his pants is sentenced, fined
- 2 former Didion Milling officials sentenced to 2 years in Wisconsin corn plant blast
- 13-year-old charged with murder in shooting of man whose leg was blocking bus aisle
- Kid Rock tells fellow Trump supporters 'most of our left-leaning friends are good people'
- 16-year-old boy arrested in NYC subway shooting that killed 1 and wounded 5
Ranking
- Flurry of contract deals come as railroads, unions see Trump’s election looming over talks
- Mississippi seeing more teacher vacancies
- The 2024 Met Gala Co-Chairs Will Have You on the Floor
- North Carolina lawmakers say video gambling machine legislation could resurface this year
- Why Jersey Shore's Jenni JWoww Farley May Not Marry Her Fiancé Zack Clayton
- New York redistricting panel approves new congressional map with modest changes
- Authorities are investigating the death of Foremost Group CEO Angela Chao in rural Texas
- Post-5 pm sunsets popping up around US as daylight saving time nears: Here's what to know
Recommendation
-
King Charles III celebrates 76th birthday amid cancer battle, opens food hubs
-
Sgt. Harold Hammett died in WWII. 80 years later, the Mississippi Marine will be buried.
-
Amy Schumer Responds to Criticism of Her “Puffier” Face
-
The Excerpt podcast: At least 21 shot after Kansas City Chiefs Super Bowl parade
-
Katharine Hayhoe’s Post-Election Advice: Fight Fear, Embrace Hope and Work Together
-
Super Bowl 2024 to be powered by Nevada desert solar farm, marking a historic green milestone
-
Bystander tells of tackling armed, fleeing person after shooting at Chiefs’ Super Bowl parade
-
Co-inventor of Pop-Tarts, William Post, passes away at 96