What to Know About ERC Refunds

The IRS has now announced that it has processed around 400,000 employee retention credit (ERC) claims and approved $10 billion worth of claims.  That does not always mean that all approved claims were correctly approved.  Taxpayers who have questions about whether their claim is valid should know that cashing an ERC refund check will start the two-year statute of limitations that the IRS has to challenge and reclaim a refund check that was issued based on an erroneous ERC claim.  Taxpayers who cash their checks also remain eligible to participate in the IRS' Voluntary Disclosure Program (VDP), which is open until November 22, 2024.  The VDP allows taxpayers to disclose their erroneous claim and repay the amounts that were improperly received at a 15% discount, while also avoiding penalties, interest and future audit risks.  Taxpayers whose claims were denied also have the option of appealing the IRS decision if they are certain they deserved to claim the COVID-era credit.  For more information on the ERC, visit Tax Facts Online. Read More: Link to Q8555.