Nonprofit Resources


IRS Provides an Update on Employee Retention Credit Claim Processing

On June 20, 2024, the IRS provided an update on various matters related to the Employee Retention Credit (ERC), including whether it will lift the moratorium on processing new ERC claims submitted after September 14, 2023. The IRS put the processing moratorium into place in September 2023 to combat a flurry of invalid ERC claims and to gain more time to analyze the backlog of ERC claims that the IRS had at that time.

In March 2024, the IRS stated that it hoped to begin processing new ERC claims sometime in late spring of 2024. However, the June 20 IRS announcement notes that the moratorium will remain in effect indefinitely while the IRS gathers additional feedback from various parties, including Congress, to determine the future of the ERC.

Claimants should expect exceedingly long wait times while the IRS assesses what to do next. Organizations that are waiting on the IRS to process their ERC claim do not need to take any action at this point. Further, the IRS emphasized that organizations should not call the IRS regarding the status of their claim, as additional information will likely not be available.

Other takeaways from the news release include the following:

  • The IRS believes that between 10% to 20% of claims are in the “highest-risk” group for being an erroneous ERC claim, 60% to 70% are considered to have an “unacceptable” level of risk, and 10% to 20% are considered “low-risk.”
  • Since the start of the moratorium on September 14, 2023, the IRS has processed 28,000 claims worth $2.2 billion and has disallowed more than 14,000 claims worth more than $1 billion.
  • Also, since September 14, 2023, the IRS has received an average of over 17,000 ERC claims per week, and its ERC claim inventory now sits at 1.4 million.
  • The ERC Withdrawal Program remains available to taxpayers.

Please contact us with questions or to learn how we can help you with the ERC. CapinCrouse offers a variety of ERC resources designed to assist organizations in any stage of the ERC process.

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