IRS Announces ERC Withdrawal Process
On October 19, 2023, the IRS announced a special process for employers to withdraw their Employee Retention Credit (ERC) claims if they believe they do not qualify for the program. This method is available to employers who wish to withdraw claims that have not been processed, are under examination, or have been paid but not deposited. To be eligible for this procedure, the ERC had to be claimed on an adjusted employment tax return, and the employer must withdraw the entire amount of the ERC claim.
This withdrawal method is another step in the ongoing initiative by the IRS to combat continued fraud in the ERC program by aggressive promotors who misled employers on ERC eligibility requirements and assisted with filing ineligible claims. Last month, the IRS announced a mortarium on processing new ERC claims for the remainder of 2023 to implement new procedures to verify the legitimacy of such claims. It is expected that the IRS will release another process for employers to repay ERC refunds without penalties in the coming months.
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David Seibel is an engineering principal for the R&D Tax Credit Practice. He combines his knowledge of tax law with his engineering expertise to maximize companies’ research credits and reduce their overall tax burdens.
David ensures clients are receiving studies that meet the highest level of quality. He conducts fieldwork, produces detailed technical calculations, and builds narratives that accurately reflect each company’s research and experimentation activity.