IRS Commissioner Daniel Werfel testifies before the House Small Business Committee on July 17, 2013.
James Lawler Duggan | Reuters
The IRS has unveiled a “voluntary disclosure program” for businesses that claimed a pandemic-era tax credit in error and want to pay the money back.
Worth thousands per employee, the employee retention tax credit, or ERC, was designed to support small businesses affected by the pandemic. The lucrative tax break sparked a cottage industry of firms pushing employers to wrongly claim the credit.
Werfel said the IRS is sending another round of letters to companies that wrongly received the ERC and those taxpayers will not be eligible for the voluntary disclosure program.
“It’s for those that have received the claim, or received their credit, and have not yet heard from the IRS,” he said.
To qualify for the program, companies must provide the IRS with contact information for any advisors or tax preparers who assisted them with the erroneous claim, along with details about the services.
Companies can apply for the program by filing Form 15435, which can be submitted through the IRS’ document upload tool.
Participants won’t owe interest or penalties if they repay 80% of the credit upon signing the closing agreement. However, interest and penalties will apply for repayment via installment agreements.
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