The IRS has reopened its Voluntary Disclosure Program to help businesses correct ERC claim errors with a 15% discount until November 22, while also sending out letters about potential ERC mistakes and urging businesses to act quickly to avoid penalties and interest.
IRS Reopens Voluntary Disclosure Program for ERC Claims: Fix Mistakes with a 15% Discount Before November 22
According to Kiplinger, the IRS has reopened its Voluntary Disclosure Program (VDP) to help businesses fix mistakes on Employee Retention Credit (ERC) claims. This Voluntary Disclosure Program, which runs until November 22, offers a 15% discount for businesses that correct ERC claims from 2021. This is a bit less than the 20% discount offered earlier this year. In the first round, over 2,600 businesses fixed $1.09 billion in errors, and the IRS hopes to recover even more now.
The IRS is sending up to 30,000 letters to businesses with possible ERC errors from 2021 and some from 2020. Businesses that get these letters won’t be able to join the Voluntary Disclosure Program for that tax period. These letters are focused on larger claims because ERC amounts were higher in 2021.
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$1.09 Billion in ERC Errors: IRS Reopens Voluntary Disclosure Program for Businesses to Correct Mistakes (PHOTO: Don’t Mess With Taxes)
ERC Claim Withdrawal Program: Cancel Claims Without Penalties and Avoid Future Costs
Businesses with pending ERC claims might also want to use the ERC Claim Withdrawal Program, which allows them to cancel claims without penalties or interest. This program has already led to over $677 million in withdrawn claims. The IRS is encouraging businesses to act quickly to avoid future problems and costs.
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