On October 19, 2023, the IRS announced the details of a special withdrawal process to help those who filed an Employee Retention Credit (ERC) claim and are concerned about the accuracy of the credit claimed. The withdrawal process was noted when the IRS announced a moratorium on processing new ERC claims on September 14 in an effort to protect small businesses and organizations from scams. Now, certain employers can withdraw their claim and avoid future repayment, interest, and penalties. Claims that are withdrawn will be treated as if they were never filed.
Withdrawing a Claim
The special process is for eligible employers to withdraw ERC claims that have been filed but for which the employer has not received a refund. Those who received a refund check but have not cashed or deposited it can still withdraw their claim. The IRS is also working on additional guidance to help employers who claimed the ERC and have already received the payment. Employers contacted by the IRS indicating they are under audit can send the withdrawal request to the assigned examiner or respond to the audit notice if no examiner has been assigned.
IRS Response to Withdraw
It is important to note that the special withdrawal process is not automatic. Taxpayers will receive a letter from the IRS about whether their withdrawal request was accepted or rejected. If the IRS accepts the withdrawal, taxpayers may need to amend their income tax return.
DHJJ Helps Businesses Understand Tax Impacts
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