On Oct. 19, 2023, the Internal Revenue Service (IRS) announced a special withdrawal process for employers that submitted claims for Employee Retention Credit (ERC) and are concerned their claims may be inaccurate.
Under the program, employers who submitted ERC claims but have not yet received a refund may withdraw their claims and avoid future repayment obligations, interest, and penalties.
The IRS created the withdrawal program to help businesses that were pressured by aggressive marketing tactics into submitting ERC claims that the businesses now believe are or may be ineligible claims.
The ERC is a refundable tax credit intended for businesses that continued to pay employees during the COVID-19 pandemic despite experiencing a significant decline in gross receipts and/or a full or partial suspension of business activities due to governmental order.