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Nov 29, 2023 Erin Crowley

CPAs: Get Ready to Answer These ERC Questions in 2024

CPAs: Get Ready to Answer These ERC Questions in 2024

The employee retention credit (ERC) was designed to help businesses that paid employees during the Covid-19 pandemic and suffered significant loss of revenue of full or partial suspension due to Government Order. Unfortunately, third party ERC companies have convinced businesses to file unqualified claims.

The IRS has been warning the public about ERC mills for over a year, and in September 2023 placed a moratorium on processing new ERC claims.

In early November, the IRS broadcasted a webinar addressing pertinent ERC Moratorium updates. Here are some key takeaways from the webinar:

  • ERC Processing Update: Claims filed after September 13, 2023 are not currently being processed. It is unclear when claims filed after the indicated cutoff date will begin the review process. Claims filed on or before September 13, 2023 may take 180+ days for review.
  • Ineligible filers-who may have been deceived by scam promoters-can withdraw to avoid erroneous refunds and penalties.
  • According to the IRS, these are six ERC scam tactics your clients should be looking out for. 

Following the latest IRS updates, you can likely expect to get questions like these from your small business clients: 

  • How does the recent update on ERC processing impact claims submitted after September 13, 2023, that are currently not being processed?
    Our thoughts: It's difficult to estimate how long legitimate claims will take to be paid. We suggest telling clients 9 months or more for planning purposes.

  • Will the deadline for ERC 2020 be extended as a result of the Moratorium? 
    Our thoughts: It's currently unclear whether or not the IRS will extend the 2020 deadline which is scheduled for April 15, 2024. Considering the level of fraud, you should advise clients to assume the deadline will not be extended, and to proceed with legitimate 2020 ERC claims before the deadline.

  • Where can businesses call to find out the status of a return?
    Our thoughts: Utilize the Internal Revenue Service business helpline at (800) 829-4933. When calling the IRS for a status update, be sure to have EIN and tax return information readily available.

ERC Questions? Contact Us!

If you have additional specific questions, our in-house experts can help you. For ERC support, contact Drew Schildwachter:

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Published by Erin Crowley November 29, 2023