The processing pause on new ERC claims will be in effect through at least the end of 2023. Normal processing times for existing claims could stretch from the standard goal of 90 days to 180 days or longer.
IRS increasingly alarmed by ‘unscrupulous actors’
“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,” Werfel said.
The IRS has received approximately 3.6 million claims over the course of the program and the current open inventory has more than 600,000 claims, most of which have been received over the past 90 days.
As of July 1, 2023, the IRS criminal investigation division has initiated 252 investigations involving more than $2.8 billion of potentially fraudulent ERC claims. Some 15 of the 252 investigations have resulted in federal charges and six of the 15 have resulted in conviction, Werfel said.
“We want businesses to step back and talk to a trusted tax professional, not a promoter out looking to take a big chunk of a refund,” he said.
The agency is working on a settlement program for small businesses that may have wrongly received the refund.
