Reports on Wednesday indicate that the IRS—via Linda Azmon, special counsel at the Tax Exempt and Government Entities Division Counsel—has expressed its intention to release the highly anticipated details of the ERC Withdrawal Plan today, October 19, 2023.
Last month, the IRS announced an ERC processing moratorium on newly filed claims, citing growing concerns that a substantial proportion of new claims are “ineligible and increasingly putting businesses at financial risk by being pressured and scammed by aggressive promoters and marketing.” You can read a more detailed discussion of that announcement’s components here.
As part of that moratorium announcement, the IRS concurrently indicated that it will permit employers with pending, unpaid ERC claims to “withdraw” such claims and permit some to repay their refunds if they no longer think they qualify. At that time, though, the IRS could only express that more details of that withdrawal plan would be forthcoming. As reported yesterday, the IRS is expected to release these details today.
As reported in Bloomberg Law, the IRS explained that taxpayers who are still waiting for a refund will be able to participate in the process. According to Bloomberg Law, Azmon (speaking yesterday at an ABA Tax Section’s virtual conference) explained that:
· A taxpayer’s request for a withdrawal means the “taxpayer is requesting that the amended return not be processed at all.”
· “It’s going to be required that the complete return be withdrawn.”
· Taxpayers who willfully filed a fraudulent claim and then subsequently withdraw the claim will remain subject to potential criminal investigation and prosecution.
If you believe you have been misled by promoters or have any other uncertainties about your ERC claims, we urge you to contact a trusted tax professional as soon as possible.