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IRS ERC Pause: What the Moratorium Means for Applicants

On September 14th, the IRS announced that they are not processing new claims for the Employee Retention Tax Credit. Up until then, the IRS had been accepting applications for a refundable tax credit to help businesses recover from the financial impact of the COVID-19 pandemic. Through this tax credit, eligible businesses were able to claim up to $21,000 per employee through the program.

IRS ERC pause

The ERC tax credit was established under the CARES Act to keep employees on payroll during the pandemic. Due to government restrictions, many businesses were forced to either partially or fully suspend business operations. Other businesses saw a significant decline in gross receipts due to government-mandated lockdowns. According to the IRS, the deadline for filing claims for the ERC tax credit for the 2020 tax year was April 14, 2024, while the 2021 tax year deadline was April 14, 2025. Now, the IRS is putting a temporary pause to the program.

It is important to note that eligible businesses are still encouraged to submit their claims to the IRS. Due to increased scrutiny towards false claims, you should only apply with the help of a trusted ERC specialist.

What Triggered the IRS ERC Pause?

The temporary ERC pause was due to the large influx of false claims the IRS was receiving. When businesses do not fully qualify for the IRS, they could risk getting audited for submitting a false claim. These scams have led to long delays in qualified applicants receiving their refundable tax credit.

False ERC claims are typically submitted to the IRS by scam ERC mills. These ERC mills charge high fees to businesses to submit their application to the IRS. The caveat with ERC mills is that they submit claims even if the business does not fully qualify for the ERC tax credit, creating a surge in false claims to the IRS. To avoid ERC scams such as this, you should only submit an ERC application to the IRS, once the application window reopens, through a certified and experienced ERC specialist.

What Is an IRS Moratorium?

The IRS issues a moratorium on new filing claims for the ERC tax credit that prohibits their ERC program from processing new applications. This decision was made by the IRS commissioner to suspend processing of ERC claims immediately. .

How the ERC Pause Impacts Current Applicants

The IRS is still processing applications that have already been submitted to the IRS. However, due to additional scrutiny to combat ERC scams, processing times could now take even longer than usual. There is also a settlement process in which businesses can withdraw fraudulent claims submitted to the IRS. Even though the IRS announced changes to how they are handling the ERC claims, businesses are still encouraged to submit claims before the original deadlines.

When Will the IRS Take New ERC Applicants?

Business owners can still submit claims to the IRS for the ERC tax credit program, as long as they are fully eligible. The IRS is cracking down on false claims submitted to the IRS, but businesses who qualify are still able to submit their applications. To avoid scrutiny from the IRS, only apply for the ERC tax credit with a trusted provider. Five Star Tax – The ERC Consulting Experts is a group of certified tax professionals and tax attorneys with expertise working with the IRS to help submit your claim.

IRS ERC Recommendation: Consult with a Certified Tax Professional

Because of the surge of false claims being sent to the IRS, the IRS shared one important recommendation to businesses looking to apply for ERC: consult with a certified tax professional. A certified tax professional ensures businesses that they are fully eligible before applying. The IRS also recommends avoiding ERC mills that charge hefty upfront fees to submit your claim. Five Star ERC Experts utilizes a complaint fee model that does not charge businesses high upfront fees to help you submit your claim to the IRS.

Five Star ERC Experts takes this a step further through audit protection. If you submit a false claim to the IRS, you could risk receiving an ERC audit. Through Five Star ERC Consulting Experts’ audit protection process, businesses are guaranteed to be in good hands when filing their tax credit. With a team of certified tax attorneys and tax consultants, businesses are ensured that they are fully eligible before their application is submitted.

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