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Thursday, April 18, 2024

IRS unveils ‘voluntary disclosure program’ for businesses duped by pandemic-era tax credit

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“We urge employee retention credit recipients who think they were misled by promoters to review these special programs, including either the disclosure program or the withdrawal option, depending on their situation,” Werfel said.

The new program comes roughly two weeks after the IRS announced it’s sending more than 20,000 ERC rejection letters to taxpayers as part of its crackdown on “dubious” filings. 

Werfel said the IRS is sending another round of letters to companies that wrongly received the ERC and those taxpayers will not be eligible for the voluntary disclosure program.

“It’s for those that have received the claim, or received their credit, and have not yet heard from the IRS,” he said.

To qualify for the program, companies must provide the IRS with contact information for any advisors or tax preparers who assisted them with the erroneous claim, along with details about the services.  

Companies can apply for the program by filing Form 15435, which can be submitted through the IRS’ document upload tool.

Participants won’t owe interest or penalties if they repay 80% of the credit upon signing the closing agreement. However, interest and penalties will apply for repayment via installment agreements.

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Marcus Monroe
Marcus Monroe
Marcus Monroe, a recent graduate from the University of Chicago with a degree in Journalism and Economics, is the newest addition to the business reporting team. With internships at major financial publications under his belt, Marcus brings a fresh and analytical approach to business news, focusing on market trends and their impact on the local economy.
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