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At the end of 2023, the IRS sent another 20,000 disallowment letters to those who filed inaccurate Employee Retention Credit claims. Amid remediation efforts, they announced a voluntary disclosure program that allows businesses to repay their incorrect claim while keeping 20% of the payout they initially received. Those wanting to participate have until March 22, 2024, to apply for the program.

What Does This Mean for Employers Who Filed an Inaccurate Claim?

Employers who filed an ERC claim in error and did not receive a disallowance letter or communication were encouraged to file for a withdrawal at the end of 2023. A withdrawal allowed them to avoid further action from the IRS or incurring additional penalties and interest.

Now that 2024 has arrived, qualifying taxpayers can participate in this newly announced voluntary disclosure program and repay 80% of their initial claim. Action will be needed quickly to meet the March deadline.

Who is Eligible for the Program?

This program applies to any business or employer that was misled by a promoter or filed for the ERC by mistake and has already received payment. More specifically, they must meet the following requirements:

  • The employer is not under criminal investigation and has not been notified that they are under criminal investigation
  • The employer is not under an IRS employment tax examination for the tax period for which they’re applying to the voluntary disclosure program.
  • The employer has not received an IRS notice and demand for repayment of part or all of the ERC.
  • The IRS has not received information from a third party that the taxpayer is not in compliance or has not acquired information directly related to the noncompliance from an enforcement action.

How to Apply

To be considered for the program, an employer must fill out an application form and submit it using the IRS document upload tool. Installment options are available for employers who cannot immediately pay back 80% of the ERC refund they received. It is wise to consult a reputable ERC professional to review documentation and receive guidance on the process.

Calvetti Ferguson ERC Assistance

Our team of specialty tax credit advisors is ready to assist you in reviewing your claim and guide you through the voluntary disclosure process. We want to ensure your business does not suffer severe penalties, unwanted interest, or further actions with the IRS. With our extensive expertise in the ERC and experience working with the IRS, we can provide detailed assistance to help you consider taking advantage of this unique opportunity.

Contact Us

Calvetti Ferguson works with middle-market companies, private equity firms, and high-net-worth individuals nationwide. Regardless of the complexity of the compliance, assurance, advisory, or accounting need, our team is ready to help you. Please complete the form below, and we will follow up with you shortly.