IRS ERC Moratorium Due to Scams

You're grappling with the IRS's recent freeze on new Employee Retention Credit claims. Amidst rising fraud, they're stepping up compliance checks, causing delays. If you've already filed, don't fret. Your claim is still in the queue.


To better understand what the IRS ERC Moratorium means for present and future claims, it is important to cover the following points:

  • What the ERC pause means for current claims
  • Withdrawing an existing claim for businesses that have already filed
  • Waiting for the IRS ERC settlement program to be finalized
  • ERC criminal investigations and IRS guidance
  • Why did the IRS pause these claims?
  • What is next for employers
  • Best ERC filing company

Remember, beware of quick fix scams and always work with trusted tax professionals.

IRS ERC Moratorium Due to Scams

While you're grappling with the extended wait times on your ERC claims, it's important to understand that this IRS moratorium has been put in place due to an influx of scams and fraudulent claims. This pause on new Employee Retention Credit (ERC) applications is meant to protect honest business owners like you and the integrity of the tax system.

According to the IRS, there's been a surge in questionable submissions, leading to a standard processing time extension to 180 days or more, especially if your claim requires further examination or audit. The IRS has flagged thousands of ERC claims for audit, with hundreds of criminal cases already under investigation. In one highlighted case, a New Jersey tax preparer was arrested for allegedly seeking over $124 million from the IRS by filing over 1,000 false tax forms claiming the ERC.

Commissioner Werfel voiced concerns about this growing evidence of fraudulent claims, stating, 'The continued aggressive marketing of these schemes harms well-meaning businesses and delays the payment of legitimate claims, making it harder to run the rest of the tax system.'

However, it's not all bad news. Despite the pause, payouts on previously filed ERC claims will continue where appropriate during the moratorium. You may be asked to provide additional documentation to verify your claim's legitimacy, though. So, make sure you're keeping accurate records and working with a trusted tax professional to navigate this complex situation. The goal here is to ensure that the ERC continues to aid businesses impacted by the pandemic, without being exploited by unscrupulous actors.

As the IRS grapples with a surge in questionable ERC claims, it's crucial to know the right steps to take.

If you're waiting on an ERC claim, expect delays; if you haven't filed yet, you might want to review the guidelines and hold off.

For those who've filed and now have doubts, consider withdrawing your claim and keep an eye out for the IRS's forthcoming ERC settlement program.

What the ERC Pause Means for Current Claims

If you're currently awaiting an ERC claim, it's important to understand that the IRS is working diligently to process these claims, but the increased scrutiny to combat scams and fraud will likely result in longer wait times.

Be Patient: Remember, the IRS is dealing with a high volume of claims, so it might take up to 180 days or longer before your application is processed.

Stay Informed: Keep abreast of the latest updates from the IRS about the ERC program. You can find these updates on the official IRS website.

Seek Professional Help: If you're unsure about the status of your claim or need assistance, consider seeking help from a trusted tax professional.

Remember that the IRS is doing its best to ensure only eligible businesses receive ERCs.

For those who haven't filed a claim yet, consider reviewing the guidelines and waiting to file

Before you rush to file an ERC claim, it's crucial that you thoroughly review the guidelines, given that the IRS is currently ramping up efforts to address businesses with questionable claims. Don't fall into the trap of unscrupulous promoters seeking to make a quick buck.

Instead, consult a trusted tax professional, and review the new question-and-answer guide provided by the IRS. Remember, many businesses don't qualify for the ERC and filing an ineligible claim can lead to complications.

With the ongoing moratorium, the IRS is scrutinizing claims more strictly and processing times have lengthened. Avoid haste, understand the eligibility criteria, and wait for the right time to file.

It's better to be safe than sorry with your ERC claim.

Withdrawing an Existing Claim for Businesses That Have Already Filed

You'll need to take immediate action to withdraw your existing claim if you've already filed and are now questioning the legitimacy of your Employee Retention Credit (ERC) claim. The IRS is working on refining guidelines for withdrawing pending claims, especially for businesses that may have improperly filed due to misinformation or misunderstanding of the eligibility criteria.

To help you navigate this process, consider the following steps:

  1. Review your claim with a trusted tax professional to ensure it meets the ERC eligibility criteria.
  2. Keep an eye out for the IRS's upcoming instructions on how to withdraw your claim.
  3. If your claim is already under audit or awaiting audit, understand that you can still withdraw it.

Take these steps seriously to avoid potential penalties and compliance issues.

Why Did the IRS Pause These Claims?

Waiting for the IRS ERC Settlement Program to be Finalized

While waiting for the IRS to finalize its ERC settlement program, it's crucial that you stay informed and proactive, working closely with your tax advisor to review any potentially questionable claims.

Monitor updates from the IRS on the settlement program, expected to be detailed this fall.

If your business received an ERC that you now suspect was in error, this program will enable repayment without penalties or future compliance action.

The IRS is also assessing how to deal with situations where a promoter's contingency fee was paid out of the ERC payment.

As the IRS works diligently to protect honest businesses from scams and fraud, it's essential to stay vigilant, review your claims, and be prepared to take action when the settlement program is finalized.

ERC Criminal Investigations and IRS Guidance

In dealing with the rise in fraudulent Employee Retention Credit (ERC) claims, you should be aware that the IRS is intensifying criminal investigations and offering specific guidance to help prevent scams. The IRS has initiated probes into over $2.8 billion in potentially fraudulent ERC claims, signifying a committed crackdown on fraudulent activity within the program.

As part of its guidance, the IRS has developed new frequently asked questions to help businesses understand the ERC and avoid falling victim to scam promoters. By visiting the IRS's ERC website, you can access these tools to ensure proper understanding and application of the credit.

But the IRS's efforts don't stop there. The agency is also working hand in hand with the U.S. Department of Justice to address promoters who disregard rules and exploit the system. This collaboration emphasizes the seriousness of the situation and the commitment to maintaining the integrity of the ERC.

As a business owner, you can help by:

  1. Reviewing the IRS guidance and tools to understand your eligibility for the ERC.
  2. Avoiding promoters who pressure you to apply fraudulently.
  3. Consulting with a trusted tax professional if you need help claiming the credit.

What is Next for Employers?

You'll need to buckle up for a longer wait if you've got a legitimate claim pending, as the IRS crackdown on scams has inevitably slowed down the processing times. If you've uncovered a recent claim, it's crucial to verify your eligibility thoroughly, bearing in mind the IRS warnings about the program. Struggling businesses will have to hold on for a while before they see any funds, potentially not until 2024 or even later.

Before you get too worried, remember that there are certain steps you can take to navigate this situation:

  1. If you're uncertain about a pending claim, wait for the IRS to publish the procedure to withdraw it. This allows you to avoid potential penalties or complications.
  2. Keep an eye out for the IRS settlement program, especially if you believe you might've received funds in error. This program will provide a pathway to rectify any mistakes without harsh penalties.
  3. Despite the pause, it's still worthwhile to submit a claim if you're eligible. The deadlines for 2020 and 2021 claims are April 15, 2024, and April 15, 2025, respectively.

While these developments are certainly challenging, they're crucial for maintaining the integrity of the ERC program and ensuring it serves its original purpose of aiding small businesses. It's vital to exercise caution and seek professional guidance during this time. Remember, while the IRS has paused these claims, legitimate claims should still ultimately be processed.

Best ERC Filing Company?


To protect yourself from unintentional misreporting, it is crucial that you enlist a qualified ERC filing company that focuses solely on this specific tax credit and nothing else. ERC Specialists is an experienced payroll tax company made up of former IRS agents and financial experts with decades of combined knowledge. This company’s advisory board members is also former state and national attorney generals. Your claim is in good hands with ERC Specialists.

Simply click the button below to get started with a quick qualification form hosted by LINQQs. Once the initial form and documentation are completed, LINQQs will transfer these documents to ERC Specialists for accurate and speedy processing.

It should be emphasized that despite the temporary hold on ERC processing, LINQQ’s and ERC Specialists continue to submit files and assist businesses in applying for the Employee Retention Credit. This will ensure that their clients will be at the front of the line when processing resumes. The program is still active, and the IRS is still accepting ERC submissions.

ERC Specialists BBB

ERC Specialists is Better Business Bureau accredited and has garnered numerous positive customer testimonials within Google Reviews as well. See the many testimonials below.

ERC Specialists  Google Reviews


How Long Does It Take To Get A Refund From Employee Retention Tax Credit?

It's often confusing to figure out how long it takes to get a refund from the Employee Retention Tax Credit (ERTC). But don't worry, we'll explain it in this article.

First of all, when you apply for ERTC, you need to provide certain documents and information that your accountant or tax preparer will use to complete the process. This might include things like quarterly wage statements or payroll reports.

After you have everything ready, it usually takes 2-3 weeks for the project to be completed and for an amended 941-x form to be issued. But keep in mind that these figures can vary depending on factors such as the complexity of the situation, your compliance history with taxes, or if any additional documentation is needed.

That said, you should always check with your accountant or tax preparer about their timeline so that you know exactly when you're likely to receive your refund. No matter what though, it's important to make sure that all of your paperwork is properly submitted and up-to-date – otherwise delays may occur and could affect when you get paid back!

Employee Retention Tax Credit Qualifications

The Employee Retention Tax Credit (ERTC) is a great way to help employers keep their employees even during tough times. To qualify for the credit, there are certain criteria that must be met.

Here's what you need to know:

* An employer must have had operations suspended due to COVID-19 or experienced a significant decrease in gross receipts.
* If an operation was shut down by government order, it counts as suspension of operations.
* If the business saw a drop in revenue over 2020 or the first three quarters of 2021, then this would count as a significant decline in gross receipts.

A new startup business could also qualify if they meet certain requirements in either the third or fourth quarter of 2021.

It's important to remember that not all businesses will be eligible for ERTC -- but those who do can receive up to $7,000 per employee! This money can really make a difference and help companies stay afloat while trying times pass. Plus, once qualified, employers don't have to wait until next tax season to get the funds - they can start claiming them right away.

Employee Retention Tax Credit 2023 Deadline

Now that we know the qualifications for the Employee Retention Tax Credit, let's move on to when it needs to be filed by.

The present deadline is April 15th, 2025.This means that if you are looking to apply for this credit during any of these years, make sure you do so before those dates.

It’s important to note that even though there are many opportunities throughout the year to apply for different tax credits or deductions, ERC only has a single filing window per year. So don't miss out! It’s also worth noting that applying late could mean that you won't qualify for the maximum amount possible.

When it comes down to it, making sure you take advantage of all available credits and deductions is essential when filing taxes - especially ones like ERC which have such a short window of opportunity each year. Keep an eye out and make sure not to miss deadlines or else you may end up losing out on some valuable savings.

Frequently Asked Questions

What is the Employee Rentention Credit (ERC)?

The Coronavirus Aid, Relief, and Economic Security Ac, signed into law on March 27, 2020, included two programs to assist businesses with keeping workers employe: Employee Retention Tax Credit (ERTC) administered by the Internal Revenue Service and the Payroll Protection Program (PPP) administered by the Small Business Administration.

How is ERC different from the Payroll Protection Program(PPP)?

PPP funds are not taxable as revenue and you may still take deductions for the payroll covered by PPP. The funds from the PPP are distributed based on 2.5 months of payroll and a minimum of 80% of the funds must be used on payroll to be eligible for forgiveness.

ERTC tax credits, however, are credits (or refunds) for a percentage of payroll in each quarter that you qualify. There are specific rules for determining eligibility by quarter, and limiting the dollars that can be claimed for each employee.

If I Received Funds from the PPP, Do I Still Qualify for the ERTC?

The short answer is “Yes”. You can claim ERTC even if you received PPP funds. In March of 2021, The American Rescue Plan Act of 2021 created expansions  and modifications to existing criteria of Employee Retention Tax Credit.

Businesses that received PPP funds could now also claim ERTC  tax credits. ERTC credits can be retroactively claimed for businesses that qualified in 2020. The ERTC qualification period was extended through 9/30/21 with lower eligibility requirements.

The refundable credit amount increased from 50% of qualifying wages in 2020 to 70% in 2021. The per-employee cap on qualifying wages was increased from $10,000 for all of 2020 to $10,000 per quarter for the first 3 quarters of 2021.

How Do I Apply for the Employee Renention Tax Credit and My CPA Do This?

Unlike the Payroll Protection Program,  there is technically no application process for the Employee Retention Tax Credits. You would simply claim the ERTC tax credit like any other tax credit by asserting to the IRS that you can legally claim the credit.

Whether your tax accountant is a CPA or EA, they most likely only prepare Federal and State Income Tax Returns. However, ERTC credits are claimed against Employment Taxes on Form 941, and cash advanced through Form 7200.

The ERTC program is quite complex, which one of the main reasons most CPA's do not mention or attempt the claim process. It is also the reason most businesses pursued the PPP loan instead.

For prior quarters, you must file an amended form (the Form 941-X) to reduce your current quarter’s tax contribution. Also, you must request a refund of excess credits.

ERC Specialists provide a focused and dedicated service for processing ERC claims exclusively.  Most business CPAs reach out to ERC Specialists for their Employee Retention Tax Credit claim needs. Click the button below to access the secure LINQQs portal to qualify and get your claim started before this plan expires. This provides audit protection and peace of mind.

Click the button below to start your claim