The IRS has just introduced a new opportunity for employers to rectify questionable Employee Retention Credits (ERC) through the Voluntary Disclosure Program. Aimed at providing a discounted repayment option, this initiative presents a valuable chance for businesses to address potential discrepancies in their ERC claims. Let’s explore the key aspects of the IRS’s new initiative.

Understanding the IRS Voluntary Disclosure Program:

The newly introduced Voluntary Disclosure Program is part of a larger IRS initiative targeting misleading ERC claims, explicitly focusing on businesses enticed into filing questionable applications. The program allows businesses to voluntarily rectify ERC claims and repay only 80% of the received credit.

Key Points to Consider:

Application Deadline: It is essential to take prompt action to benefit from this opportunity. Interested employers must submit their applications for the Voluntary Disclosure Program by March 22, 2024.
Discounted Repayment: One of the primary incentives of the Voluntary Disclosure Program is the opportunity for employers to pay back questionable ERC amounts at a discounted rate – 80% of the received credit. This discounted repayment option serves as a financial incentive for businesses to address any discrepancies voluntarily.
Transparent Correction Process: Participating in voluntary disclosure demonstrates a commitment to transparency and compliance. By addressing potential issues voluntarily, businesses can mitigate the risk of facing more severe consequences in the future.
Avoidance of Potential Audits: Voluntarily disclosing and correcting ERC discrepancies through this program may reduce the likelihood of facing audits or other enforcement actions related to these claims.
Professional Guidance: Employers considering participating in the program should seek professional guidance from experienced and reputable accountants or tax advisors. Professional expertise will ensure a thorough understanding of eligibility criteria, application procedures, and repayment processes.

Who can apply for ERC Voluntary Disclosure?

To qualify for the program, employers must meet specific criteria, including:

  • The applicant cannot be under criminal investigation or notified of impending criminal scrutiny.
  • The applicant cannot be under an IRS employment tax examination for the relevant tax period.
  • The applicant cannot have received a notice and demand to repay part or all of the ERC.
  • The IRS should not have received information from a third party indicating the applicant is not in compliance.

The IRS Voluntary Disclosure Program for Employee Retention Credits presents a unique opportunity for businesses to rectify questionable ERC claims, promote financial transparency, and mitigate compliance risks. If you need help, Boris Benic and Associates can help you stay informed, act promptly, and leverage this opportunity to ensure your business’s continued financial health and integrity.