ERC Program
IRS Shuts Down ERC Program Due To Scam Surge (Employee Retention Credit)

Amid rising concerns about a flood of improper Employee Retention Credit claims, the Internal Revenue Service today announced an immediate moratorium through at least the end of the year on processing new claims for the pandemic-era relief program to protect honest small business owners from scams.

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Hello, my name is Carlos from Freedom Tax Accounting, and we wanted to share the latest news from the IRS. Basically, the IRS is putting a stop or a pause on the ERC program or the Employee Retention Credit program. Why? The IRS has been warning business owners for, I would say, the last 18 months to watch out for fraud, and a lot of fraud has been going around of business owners claiming this credit when they are not eligible to get it. Unfortunately, there have been many companies that have been doing aggressive marketing toward business owners, telling them that they are eligible to get these funds from the IRS when realistically, they weren’t eligible to get them. Now the IRS is estimating that they have paid out $8 billion with a B, and $8 billion has been paid down to fraudulent claims. That’s a lot of money. Basically, the IRS says, Wait, there’s a problem in the way we’re processing these claims. We want to slow things down and we’re going to put new provisions in so that any new claims that come in, they’re now going to be processed differently. This means that it’s going to take a lot longer to get these ERC claims.

Let’s go to the official IRS website. This was published last night where basically the IRS is confirming, let me put it bigger so you can see it, that immediately they’re going to have a moratorium, basically putting a pause to the process until the end of the year. Okay, the IRS is saying that now processing times will be longer. Why? Because they’re shifting their focus to review the claims for compliance concerns, including intensifying audit work and criminal investigations. The IRS announced today that hundreds of criminal cases are being worked and thousands of ERC claims have been referred for audit. If you have been watching our channel for the last few months, you know that we have published a lot of videos warning business owners that the ERC is going to be heavily audited. If you received an ERC credit and you’re not sure if you were really eligible to get it or not, you may want to have your case reviewed by us, by Freedom Tax, where we can tell you if you were eligible to get them or not. If you weren’t eligible to get them, there are things you can do. Now, this is also good.

The ERC claims will go from the standard process and goal of 90 days to 180 days. Why is this important? If you have gone through the ERC process, the IRS says that they were processing these claims in 90 days, but realistically, you received the check maybe 6-9 months after you sent in the application form. If they’re now saying that they’re going to take 180 days, that’s double the processing times, that means that when they start accepting new applications again, you may not get the ERC funds for a full 12-18 months. That’s what more or less we are interpreting here. You’re going to have to wait a long time to get these credits if you are eligible to get them. Now, the IRS is saying here that the IRS is developing new initiatives to help businesses who found themselves victims of aggressive promoters. This includes a settlement program for repayment for those who received an improper ERC payment. Basically, the IRS is saying, look, we know that a lot of business owners fell for these aggressive companies that were aggressively marketing these ERC credits, making people believe that they were eligible to get these funds when they were not.

The IRS is saying that we’re working on a way so you can return the funds if you were not eligible to get them so you don’t get into trouble. Basically, that’s what’s going on. The IRS has put a stop to the ERC program. Now, what can you do? Let’s say that you are a business owner who is still applying for the ERC. If you’re still applying for the ERC, you can still send the application in, but the IRS will not process it until January 2024. Now they’re saying they’re going to take six months to process the claim and then send the check. Right now, before you send your ERC claim in, make sure that you are eligible. Here at Freedom Tax, we have been doing the ERC claims for our clients for three years now since it started, and we have been able to get our clients thousands and thousands of dollars, but we make sure that you follow the rules and that you are really eligible to get these funds. If you have a claim pending, maybe you want us to review your documentation to make sure that you’re going to send in an eligible claim to the IRS that you really get the funds that you are eligible for, and that you don’t get into trouble with the IRS in the future.

Now, if your business already sent in the ERC application and you still haven’t received the funds, first of all, you’re going to have to wait a long time to get those funds. Second, if you’re not sure if the application you sent was done correctly, you can also call us here for help with tax. We can review your application that was sent to the IRS to make sure that the amount of the credit that you’re claiming is the correct amount and that you’re really eligible to get those funds. If we find that you were eligible to get those funds, then you can have peace of mind knowing that you’re going to be okay. But if we find that you are not eligible for the funds at all or that you are eligible to get a lesser amount of what you’re claiming, then there are steps that we can take. You can be proactive with the IRS either to correct the application. Again, so again, you don’t get into trouble with the IRS. Now, if your business has already received the ERC credit and you’re not sure if you got the correct amount, you can also call us here at Freedom Tax.

We can review your case to see if you were really eligible for those funds that you already received because in these cases, it’s better to be proactive with the IRS and not wait till the IRS audits you because then you can have criminal charges against you. Once again, we’re not doing this to scare people. It’s just the reality of what’s going on. There have been people who have been criminally processed by the IRS for falsely claiming the ERC credit. Once again, make sure that you’re really eligible to get this credit. You can call us here in Freedom Tax. We can review your case so you can have peace of mind that you won’t get into trouble with the IRS in the future. Once again, the IRS has stopped the ERC program until the end of the year. This is the news that we want to share with you. Thank you for watching. If you have received valuable information in this video, please like it and share it with another business owner. Thank you for watching. God bless. Bye-bye.

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