The IRS claims that its efforts to recover funds that were wrongfully disbursed under the Employee Retention Credit are progressing.
The ERC was created to assist companies in keeping workers during the pandemic shutdown, but fraud quickly found a home with it.
Scammers Offer False ERC Application Services
Scammers exploited small firms by promising to help them apply for the ERC for a fee, even if they weren’t eligible, thanks to its intricate eligibility requirements.
The IRS reported that it had received $225 million under a voluntary disclosure program that allowed small firms to return funds and retain 20%.
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IRS Fines $572 Million for False Claims, Halts New Processing
The program ended on March 22. With another 800 entries pending processing, the money originated from more than 500 taxpayers.
A continuous initiative allowing small companies to drop unprocessed claims has resulted in 1,800 companies relinquishing claims totaling $251 million.
Last but not least, the IRS has fined $572 million for conducting audits of over 12,000 companies that submitted over 22,000 false claims.
Although it claimed it would probably start processing again this spring, the IRS stopped accepting new claims in September. IRS Criminal Investigation is currently reviewing claims totaling an additional $3 billion.
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