The Internal Revenue Service (IRS) has taken several steps to tackle the millions of invalid Employee Retention Credit (ERC) claims. First, they temporarily halted all ERC claims until the beginning of 2024. Two new programs were introduced by the IRS to aid employers who may have filed ERC claims they didn’t qualify for without realizing it.

The IRS announced the Voluntary Disclosure Program (VDP) on December 21, 2023, to aid employers who filed invalid ERC claims. The IRS created the VDP to allow taxpayers to report any potentially incorrect ERC claims by paying back 80% of the tax credit received by the company. Only available until March 22, 2024, employers should look into the VDP and determine if they should file for it.

Brooks Nelson, Partner and Strategic Tax Leader, and Sarah McGregor, Tax Director, talk with Martin Karamon, Tax Credits and Incentives Advisory Practice Leader, about the recent guidance released by the IRS regarding the VDP and recommendations for employers as the deadline is quickly approaching to file ERC claims. 

Listen to learn more about: 

• 04:16 – Background on the ERC  
• 06:42 – Overview of new IRS programs for invalid claims
• 11:57 – What to consider before participating in IRS programs 
• 13:29 – Other options available for ERC concerns
• 18:19 – Recommendations for employers considering filing ERC claims before the deadline

Related Guidance

• Understanding IRS’ Voluntary Disclosures Program for Employee Retention Credit (ERC) Claims
• New IRS Employee Retention Credit (ERC) Claim Withdrawal Process
• December ERC Updates: Mastering Preparations for ERC 2024
• IRS Temporarily Suspends ERC Claims: What You Need to Know
• IRS Update on ERC Eligibility: 5 Scenarios That Do Not Qualify as Supply Chain Disruptions