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Some ERTC Payments Coming by Late Summer

IRS to Pay Some ERTC Claims - Denver CPA

Last September, the IRS announced a moratorium on the processing of new Employee Retention Tax Credit (ERTC) claims due to concern about fraud and improper claims. Not only did it mean no new submissions were accepted, but it also provided the time needed to conduct additional review of questionable submissions. When announced it was only supposed to last three months, until the end of 2023, but the moratorium is still in effect 9 months later. Unfortunately, there has not been much information available about the status of submitted claims, when refunds can be expected, or when the moratorium may be lifted. This has left many confused and wondering whether additional claims will be accepted.


Last week, the IRS issued a long awaited update on the status of the tax credit program. The agency shared that during the review period it processed 28,000 claims worth $2.2B and disallowed more than 14,000 worth more than $1B. It was also shared that compliance efforts, including the Voluntary Disclosure Program, for erroneous claims have exceeded more than $2B. Finally, the IRS confirmed that 20% of claims were deemed low risk, and payments for these legitimate claims will arrive later this summer. To help clients, prospects, and others, WhippleWood CPAs have provided a summary of the key details below.

ERTC Review Results

The review process confirmed what many had suspected, that, indeed, a high number of improper claims have been submitted. The IRS found that 20% are classified as high. The IRS has not indicated what criteria they use to determine a claim is high risk. Tens of thousands of these will be denied in the coming months. An additional 60%-70% were determined to have an unacceptable level of risk meaning additional review will need to be conducted before payment can be approved. Finally, 20% are classified as low risk. For this group, payments will be sent out later this summer.

There are other claims which appear to have calculation errors that the IRS is slowly working through. The process will take longer than in the past due to the increased level of scrutiny. If an error is identified the agency will adjust the refund amount prior to sending payment. It is also expected these claims will start to be paid later this summer.

Moratorium Status

It was also announced that the IRS intends to keep the moratorium in place due to the high number of claims that still need to be processed. There is still serious concern about the potential for aggressive marketers to once again flood the agency with improper claims.

“We decided to keep the post-September moratorium in place because we continue to be concerned about the substantial number of claims coming in so long after the pandemic,” Werfel said. “These claims are clogging the system for legitimate taxpayers. We worry that ending the moratorium might trigger a gold rush by aggressive marketers that could lead to a new round of improper claims, which would be a bad result for taxpayers or tax administration.”

The IRS will also use the additional time to consult with other federal government partners about closing new claims acceptance and extending the statute to limitations to allow more time to pursue inaccurate claims.

Contact Us

The announcement is welcome news for those with proper claims awaiting refund payment. Unfortunately, it appears the moratorium will not be lifted anytime soon leaving taxpayers with eligible claims wondering about the future of the ERTC. If you have questions about the information outlined above or need assistance with a tax or accounting issue, WhippleWood CPAs can help. For additional information, call 303-989-7600 or click here to contact us. We look forward to speaking with you soon.