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October 2023

Moratorium on Processing ERC Claims Declared

By | Uncategorized

Due to rising concerns about a flood of improper Employee Retention Credit claims, the IRS has announced an immediate moratorium through at least the end of the year on processing new claims for the pandemic-era relief program in order to protect honest small business owners from scams.

The IRS Commissioner ordered the immediate moratorium, to run through at least December 31, following growing concerns inside the tax agency from tax professionals as well as media reports that a substantial share of new claims from the aging program are ineligible and increasingly putting businesses at financial risk by being pressured and scammed by aggressive promoters and marketing.

The IRS will continue to work on previously filed Employee Retention Credit (ERC) claims received prior to the moratorium but processing times will be longer because of increased concerns about fraud. On July 26, the agency announced it was increasingly shifting its focus to review these claims for compliance concerns, including intensifying audit work and criminal investigations on promoters and businesses filing dubious claims. The IRS announced today that hundreds of criminal cases are being worked, and thousands of ERC claims have been referred for audit.

Payouts for ERC claims will continue during the moratorium period but at a slower pace due to the detailed compliance reviews. With the stricter compliance reviews in place during this period, existing ERC claims will go from a standard processing goal of 90 days to 180 days – and much longer if the claim faces further review or audit. The IRS may also seek additional documentation from the taxpayer to ensure it is a legitimate claim.

This enhanced compliance review of existing claims submitted before the moratorium is intended to protect against fraud but also to protect businesses from facing penalties or interest payments stemming from bad claims pushed by promoters.

The IRS is developing new initiatives to help businesses who found themselves victims of aggressive promoters. This includes a settlement program for repayments for those who received an improper ERC payment; more details will be available this fall.

In addition, the IRS is finalizing details that will be available soon for a special withdrawal option for those who have filed an ERC claim but the claim has not been processed. This option – which can be used by taxpayers whose claim hasn’t yet been paid– will allow the taxpayers, many of them small businesses who were misled by promoters, to avoid possible repayment issues and paying promoters contingency fees. Filers of these more than 600,000 claims awaiting processing will have this option available.

Reconstructing Financial Records After a Disaster

By | Uncategorized

Natural disasters can strike without warning, and sometimes even the most diligent taxpayers are left without the important personal and financial records they need. People may need documentation for tax purposes, federal or state assistance programs or insurance claims.

Here are some steps that can help you reconstruct your important records if you’re confronted with a disaster.

Tax records

  • You can get free federal tax return transcripts immediately using Get Transcript on IRS.gov.
  • You can also order transcripts by calling 800-908-9946 and following the prompts.
  • Keep our office information in a safe place so that we can help you reconstruct tax records, if needed.

Financial statements

Financial statements from credit card companies or banks are usually available online. You can also contact your bank to get paper copies of statements.

Property records

  • If you are a homeowner, you may be able to contact the title company, escrow company or bank that handled the purchase of your home to get documents related to the purchase.
  • Many property records are available online from tax assessors or other government agencies. Check local government websites for information.
  • If you made home improvements, you can get in touch with the contractors who did the work and ask for statements to verify the work and cost. You can also get written descriptions from friends and relatives who saw the house before and after any improvements.
  • For inherited property, you can check court records for probate values. If a trust or estate existed, you can contact the attorney who handled the trust.
  • Insurance companies often keep records related to property maintained in a home, so keep your property insurance contacts handy.
  • If you own a car, you can research the current fair-market value of most vehicles via resources available online and at most libraries. These include Kelley’s Blue Book, the National Automobile Dealers Association and Edmunds.