New ERC Disclosure Program Taxpayers to Repay Only 80% of Questionable Claims

Published: Dec 27, 2023
By: Sarah E. Adkisson
Topics: Tax

Employee Retention Credit

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The IRS has finally released details for the long-awaited Employee Retention Credit Voluntary Disclosure Program. The program will offer relief for taxpayers who may have been misled by aggressive promoters into filing dubious ERC claims. Taxpayers who meet the criteria of the program will only be required to repay 80% of improperly claimed ERC payments. Any interest a taxpayer received as part of an ERC claim does not need to be repaid and will not be included in taxable income. Taxpayers will have from December 21, 2023, until March 22, 2024, to apply for the program.

Required Information

To apply, taxpayers must submit Form 15434 containing the following information:

Their name, taxpayer identification number, address, and phone number, as well as Form 2848 when applicable,
The tax periods for which they claimed the ERC, the full amount of credit claimed (both refundable and nonrefundable), and the form used to claim the amounts, and
The name, address, and phone number of any preparer or advisor who assisted the taxpayer with the ERC claim.

Repayment

Taxpayers will calculate their repayments amounts on Form 15434. Once their application is approved, the IRS will send a closing agreement to the taxpayer. Repayment of the credit must be remitted using the Electronic Federal Tax Payment System within ten days of receipt of the closing agreement. Repayments must be made separately for each tax period for which the ERC was claimed. Taxpayers who are unable to repay the full amount may be able to enter into an installment agreement.

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Sarah E. Adkisson

Sarah E. Adkisson, Senior Manager of Tax Publishing, with nearly a decade of tax experience, provides invaluable thought leadership support to the firm's national tax team through her clear and concise articulation of complex tax topics.

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