Navigating the IRS's Employee Retention Credit (ERC) Voluntary Disclosure Program

In a recent move to address erroneous Employee Retention Credit (ERC) claims, the Internal Revenue Service (IRS) has introduced a Voluntary Disclosure Program aimed at assisting businesses in rectifying filing errors. Here's what you need to know:

Key Points:

1. Background on the ERC Voluntary Disclosure Program:

   1. Launched by the IRS to counter dubious ERC claims.

   2. Designed to aid businesses in repaying erroneously received ERC funds.

2. Program Duration and Repayment Provision:

   1. The program runs until March 22, 2024.

   2. Businesses accepted into the program can repay only 80% of the received credit.

3. Withdrawal Option for Pending ERC Claims:

   1. Employers with pending ERC claims can opt for a withdrawal program.

   2. Withdrawal allows the removal of a pending ERC claim with no interest or penalty.

4. IRS's Aggressive Approach:

   1. The IRS intensifies audits and criminal investigations regarding ERC claims.

   2. Over $100 million in withdrawals have already been received.

5. Update on the Moratorium and Denial Letters:

   1. The IRS promises an update on the moratorium in the new year.

   2. 20,000 denial letters have been mailed to ERC claimants, emphasizing the need for accuracy.

6. IRS Commissioner's Insight:

   1. IRS Commissioner Danny Werfel emphasizes the relief provided by the disclosure program.

   2. The program aims to correct errors at a lower financial cost for employers.

IRS Announces Voluntary Disclosure Program for ERC

Employee Retention Credit Voluntary Disclosure - How to Participate:

1. Application Deadline and Eligibility:

   1. Apply to the ERC Voluntary Disclosure Program by March 22, 2024.

   2. Employers must not be under criminal investigation or an IRS employment tax examination.

2. Repayment Details:

   1. Accepted businesses repay 80% of the claimed ERC.

   2. No interest on the employer's ERC refund claim needs to be repaid.

3. Installment Agreement Consideration:

   1. Employers unable to repay the full 80% may be considered for an installment agreement.

   2. Specific conditions apply, pending submission and review of necessary documentation.

4. Information Required for Application:

   1. Provide names, addresses, and telephone numbers of advisors or tax preparers.

   2. Detailed information in Announcement 2024-3 on IRS.gov.

5. How to Apply:

   1. File Form 15434, Application for Employee Retention Credit Voluntary Disclosure Program, via the IRS Document Upload Tool.

   2. Employers outsourcing payroll must follow specific instructions outlined in the form.

6. Help Options and FAQs:

   1. The IRS offers Frequently Asked Questions to aid understanding.

   2. An IRS employee will contact employers after submitting Form 15434.

7. Post-Approval Steps:

   1. If approved, employers will receive a closing agreement from the IRS.

   2. Repayment, either online or by phone, uses the Electronic Federal Tax Payment System (EFTPS).

8. Consideration for Those Unable to Pay in Full:

   1. Employers with financial constraints are encouraged to explore loans from financial institutions.

   2. The signed closing agreement must be returned to the IRS after payment.

In conclusion, the ERC Voluntary Disclosure Program provides a crucial opportunity for employers to correct filing errors, aligning with the IRS's commitment to fair and accurate tax practices. Businesses should act promptly to benefit from the program's favorable terms and avoid potential penalties down the road.

Take Action Now with Mark Sullivan Consulting:

Seize this opportunity to correct filing errors and secure your business's financial future. Mark Sullivan Consulting is your strategic partner, offering a proactive approach to the ERC Voluntary Disclosure Program. Act now to benefit from Mark's expertise, transparent practices, and commitment to your financial well-being.

Contact Mark Sullivan Consulting today to navigate the ERC Voluntary Disclosure Program with confidence. Your path to financial clarity starts HERE.

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Disclaimer: This article is for information purposes only and cannot be cited as precedent or relied upon in a tax dispute before the IRS.

Copyright 2023 Mark Sullivan Consulting, PLLC

Reference: IR-2023-247