ERC Voluntary Disclosure Program

Amid the recovery efforts from COVID-19, many businesses took advantage of the Employee Retention Credit (ERC) which allowed a credit for keeping employees on payroll. However, the regulations and requirements of the credit are complex, and many businesses may have discovered after the fact that the claimed the credit in error. IRS has been stepping up enforcement action on incorrect ERC claims in recent months. If a business loses the ERC under audit, they'll be liable to repay the credit plus penalties and interest. However, for businesses who claimed the ERC in error or by mistake, IRS has announced a Voluntary Disclosure program which allows those businesses to return 80% of the credit and not be subject to penalties. There are many requirements for eligibility for this program, so be sure to consult with your CPA to determine if you are eligible. For more information, visit irs.gov and search for ERC voluntary disclosure program.