IRS to pause accepting claims for COVID-era tax credit amid fraudulent claims
FILE-The Internal Revenue Service headquarters building in 2020. (Photo by Chip Somodevilla/Getty Images) The Internal Revenue Service is pausing accepting claims for a pandemic-era tax credit until 2024 due to rising concerns that an influx of applications are fraudulent.
The tax credit, called the Employee Retention Credit, was designed help small businesses keep paying their employees during the height of the pandemic if they were fully or partly suspended from operating.
The credit ended on Oct. 1, 2021, but businesses could still apply retroactively by filing an amended payroll tax return. A growing number of questionable claims are coming from small businesses who may or may not be aware that they aren't eligible.
Because of its complex eligibility rules, the credit quickly became a magnet for scammers that targeted small businesses, offering them help to apply for the ERC for a fee — even if it wasn't clear that they qualified.
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