The Internal Revenue Service has issued 28,000 letters disallowing Employee Retention Credit claims. The IRS said this were sent to business whose claims showed a high risk of being incorrect with the disallowances estimated to save $5 billion in payments.The agency said thousands of audits are underway and 460 criminal cases have been inflated. In addition, the IRS identified 50,000 valid claims and expects to make payments next month.
Early indicators show more than 90 percent of disallowance notices were validly issued and the IRS will work with taxpayers in which claims may have been improperly denied. The IRS will continue to adjust process and filters for determining invalid claims.
In addition, the IRS is shifting a prior moratorium on new claims filed after Sept. 14, 2023. It will now “start judiciously processing claims filed between Sept. 14, 2023, and Jan. 31, 2024” and will focus on claims with the highest and lowest risk.
