The Internal Revenue Service (IRS) has unveiled a streamlined withdrawal process for Employee Retention Credit (ERC) claims. This new option offers a lifeline to escape potential future repayment, interest, and penalties for those who may have concerns about the accuracy of their ERC claims.

Check out our blog that addresses the IRS's pause on ERC processing.

Check out our blog about the IRS's new ERC Voluntary Disclosure Program.

The introduction of the new withdrawal process is a pivotal step in the IRS's mission to deter fraud and assist those who may have been coerced or misled by ERC promoters into making illegitimate claims. Through this withdrawal option, any withdrawn claims will be treated as if they were never submitted, and the IRS will not levy penalties or interest. However, it's crucial to emphasize that individuals or businesses that willfully filed fraudulent claims, or those who played a role in such behavior, will not escape potential criminal investigations and prosecution.

Eligibility Criteria for ERC Claim Withdrawal

Employers are eligible to use the ERC claim withdrawal process if they meet all of the following criteria:

  1. They filed their ERC claim on specific adjusted employment return forms.
  2. They made no other adjustments when filing the adjusted return; it was solely for claiming the ERC.
  3. They wish to withdraw the entire amount of their ERC claim.
  4. The IRS has not paid their claim, or if the claim has been paid, they haven't cashed or deposited the refund check.

Other Considerations

Do you not meet the criteria above? There's an alternative to reduce or eliminate your ERC claim by filing an amended return. Reach out to our team for more information on this available option!

The IRS has provided specific instructions to navigate the withdrawal process, which varies depending on whether a professional payroll company or the taxpayer themselves filed the ERC claim.

Beware of Emerging ERC Scams

It's essential to remain vigilant in the face of evolving scams. Some scammers have already shifted their tactics following the September 14 moratorium announcement, attempting to entice employers into agreeing to costly upfront loans in anticipation of a refund. The IRS strongly advises taxpayers to steer clear of such loans and to educate themselves about the warning signs of ERC scams.

If you have concerns about your ERC claim or eligibility, the IRS's new withdrawal process for the Employee Retention Credit can provide a way out. Please give us a call so that we can help safeguard your financial interests and avoid unnecessary complications down the road.