Lately on the Hill
Here’s a look at recent tax-related happenings on the Hill, which includes a temporary halt on processing Employee Retention Credit (ERC) claims, as well as legislative action on Taiwan.
- IRS moratorium on processing new ERC claims. The IRS issued a news release (IR-2023-169) on September 14, 2023 announcing an immediate moratorium on the processing of new Employee Retention Credit (ERC) claims through at least the end of the year.
- The goal of this moratorium is to implement additional safeguards ensuring refund claims follow the statute and issued guidance. For at least the rest of 2023, the IRS will focus on reviewing the more than 600,000 pending refund claims before starting to review new claims in 2024.
- It is worth noting that the IRS’ standard processing time for ERC refund claims is between 90 to 180 days, but future processing could take longer due to these new safeguards.
- If a taxpayer has made an ERC refund claim through an aggressive promoter, they should consider working with a trusted tax professional to review their claim to determine if it is legitimate.
- The IRS states that it is “developing new initiatives to help businesses who found themselves victims of aggressive promoters. This includes a settlement program for repayments for those who received an improper ERC payment; more details will be available this fall.”
- The IRS also released IR-2023-170 that includes commentary on warning signs of aggressive ERC promoters. The IRS again recommends working with a trusted tax professional to file for a legitimate ERC refund claim. Warning signs published by the IRS in this release include:
- Unsolicited contact
- Large upfront fees to claim the credit
- Determining eligibility within minutes
- Percentage-based fee arrangement
- Refusal to sign the Form 941X to claim the ERC refund
- Promised eligibility based on supply chain disruption
- The IRS has published a checklist to assist taxpayers in understanding whether they are eligible for the credit.
- See our recent Tax FORsight™ alert for more information on this IRS announcement.
- Legislative action. The Senate Finance Committee unanimously approved unique legislation, U.S.-Taiwan Expedited Double Tax Relief Act, in a 27-0 vote to provide double taxation relief for Taiwan.
IN CASE YOU MISSED IT
- The IRS has announced the corporate bond monthly yield curve, the 24-month average segment rates, the 30-year Treasury securities interest rate, the 30-year Treasury weighted average rate, and the minimum present value segment rates.
- The IRS has announced the applicable federal interest rates for October.
- The IRS has released a list of proposed changes to the form for claiming research credits and requests comments ahead of the formal draft release process.
This newsletter features developing content that is subject to change at any time. It does not constitute legal or tax advice. Consult your professional advisors prior to acting on the information set forth herein.