IRS-CI to Host ERC Seminars for Tax Professionals

The IRS Criminal Investigation unit will hold educational sessions for tax professionals about the employee retention credit (ERC) next month, the agency announced on Jan. 25.

“CI special agents will host a series of educational sessions geared specifically to tax professionals about ERC at its field offices across the country,” the IRS said on Thursday. “The sessions will take place in February and are part of a nationwide initiative to ensure that tax professionals have the latest information about ERC claims and understand ERC eligibility criteria.”

The agency recently launched a new voluntary disclosure program to help businesses that applied for “questionable” ERCs and received them, particularly companies that may have filed for the credits in error. The program allows those businesses to voluntarily return money they received without having to pay any penalties or interest. The ERC is a refundable tax credit that was enacted during the height of the pandemic to encourage businesses to keep their employees on payroll. However, after noticing rampant fraud in ERC claims, the IRS announced a moratorium on processing new claims last September. It’s not yet known when—or if—the ERC program will resume.

The voluntary disclosure initiative is part of a larger effort by the IRS to clamp down on fraud within the ERC program—much of which the agency blames on aggressive marketing tactics and misleading claims by so-called ERC mills, which have encouraged ineligible businesses to apply for the credit.

The voluntary disclosure program will work alongside the agency’s existing withdrawal program, which allows businesses to retract pending ERC claims without facing any interest or penalties.

The IRS said it has been working closely with the tax community following concerns that ERC promoters were aggressively marketing and encouraging businesses to ignore the advice of tax professionals and apply for the credit anyway.

“During the COVID-19 pandemic, tax credits and loans were extended to struggling businesses. We’ve seen many of these COVID-relief programs and credits misappropriated—sometimes knowingly and in other instances not,” IRS-CI Chief Jim Lee said in a statement. “These educational sessions will help tax preparers navigate the complexities of ERC claims to ensure they’re in compliance with U.S. tax laws.”

IRS-CI special agents will walk attendees through ERC eligibility criteria, documentation requirements to receive ERC claims, and best practices for compliance and accurate reporting. These events will take place in at least 23 states and the District of Columbia and are specifically designed for tax professionals who have claimed ERCs for their clients on previous years’ tax returns. Invitations to attend will arrive by mail through the U.S. Postal Service.