The Internal Revenue Service (IRS) announced on December 6, 2023, that it is sending an “initial round” of more than 20,000 disallowance letters to businesses that claimed the Employee Retention Credit (ERC). According to the IRS’ News Release, the letters are being sent to “entities that did not exist or did not have paid employees during the period of eligibility,” and they reflect the agency’s “increased scrutiny of ERC claims in response to misleading marketing campaigns that have targeted small businesses and other organizations.”Read More

On December 4, 2023, the U.S. Department of Justice (DOJ) announced that it had entered into a $122.9 million settlement with Swiss private bank Banque Pictet et Cie SA (Banque Pictet). According to the DOJ’s press release, the settlement comes after Banque Pictet admitted to “conspiring with U.S. taxpayers and others to hide more than $5.6 billion in 1,637 secret bank accounts in Switzerland and elsewhere and to conceal the income generated in those accounts from the IRS.”Read More

A report from the federal Pandemic Response Accountability Committee (PRAC) estimates that Employee Retention Credit (ERC) fraud may have cost taxpayers more than $2 trillion since 2020. According to the PRAC, flaws in the Internal Revenue Service’s (IRS) processing procedures allowed thousands of fraudulent credit filings to go unnoticed initially. Now, however, the IRS is seeking to hold fraudulent filers accountable—and it is diverting resources from processing new claims to examining previously-filed claims for signs of fraud.Read More

The Employee Retention Credit (ERC) was one of several pandemic-era relief programs that proved to be a prime target for fraud. Pandemic-related fraud has cost taxpayers tens of billions of dollars, with an estimated $8 billion in losses resulting from fraudulent ERC claims. As a result, the Internal Revenue Service (IRS) and other federal authorities are prioritizing ERC fraud enforcement heading into 2024. Here, Washington D.C. tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains what business owners need to know.Read More