Guidance and Information

Employee Retention Credit

ERC Resources:

IRS ERC Information
IRS ERC Eligibility Checklist
IRS Red Flags for ERC
‘As if they were never filed’: IRS outlines steps to withdraw ERC claims (10/19/23)
The IRS issued a General Legal Advice Memorandum (GLAM) related to whether an employer can rely on communications from Occupational Safety and Health Administration (OSHA) for determining whether it qualifies for ERC under the full or partial suspension of operations (10/18/23)
Helping a Client Who Fell for an ERC Scam (10/26/23)
Understanding the Employee Retention Tax Credit and Preparing Against the Risk of IRS Audit and Tax Litigation (Today's CPA July-August 2023)
TXCPA Federal Tax Blog Information (9/26/23)
‘Tsunami’ of ERC claims required IRS action to halt fraud, experts say (Journal of Accountancy 9-19-23)
IRS Temporarily Stops ERC Processing (Journal of Accountancy 9-15-23)

AICPA Information:

ERC Fact or Fiction?
ERC FAQs
AICPA press release | Sept 14, 2023
AICPA Statement for the record for the HWM ERC hearing
AICPA podcast “ERC suspended: What Happens Next”
IRS Letter to Chairman Wyden on ERC

ERC News

September 2023

The IRS believes the Employee Retention Credit (ERC or ERTC) program is so rife with abuse by "ERC mills" that it has imposed an immediate moratorium on the processing of new claims, at least through the end of 2023.

The Employee Retention Credit is a complex tax credit for businesses and tax-exempt organizations that kept paying employees during the COVID-19 pandemic either when they were shut down due to a government order or when they had a significant decline in gross receipts during certain eligibility periods in 2020 and 2021.

The IRS continues to see aggressive marketing that lures ineligible taxpayers to claim the ERC. While the credit is real, many promoters are aggressively misrepresenting who can qualify for the credit. In many instances, the IRS is seeing businesses and organizations being misled by promoters into thinking they’re eligible when they are not.

Nov. 3, 2023

IRS issued a General Legal Advice Memorandum (GLAM) related to whether an employer can rely on communications from Occupational Safety and Health Administration (OSHA) for determining whether it qualifies for ERC under the full or partial suspension of operations.

Some taxpayers have argued that OSHA communications constituted an "order”
GLAM says that OSHA communications weren’t “orders” because they don’t command or mandate specific action
The GLAM provides two scenarios – refer to the link above

Reminder: GLAM is informal legal advice issued to IRS employees. Not binding guidance/not precedent.

Other Tax Notes:

Nov. 16, 2023

Tax Cuts and Jobs Act sunset

26 months to go (or sooner depending on political climate)!

Manage lifetime exemption gifts as we approach TCJA sunset.

Don’t assume that splitting gifting between spouses is optimal.
Goal is to preserve the most lifetime exemption as a family with the TCJA sunset.
Bracket management
Accelerate income and recognition events to avoid tax rate increases.
Defer expenses to capture a greater benefit if rates increase.
Itemized deduction timing
Consider timing of property tax payments and impact if State and Local Tax (SALT) cap is repealed.

SECURE 2.0 technical corrections

Congress has identified corrections that are needed
Sec 102 – Small employer pension plan start up credit
Not clear that intent was the to add $1,000 per employee in addition to the previous $5,000 startup credit.
Sec 107 – There are 2 triggering ages for the Required Beginning Date for people born in 1959.
Sec 601 – SIMPLE and SEP Roth IRAs
Currently it could be read to limit the SEP/SIMPLE Roth contribution to the Roth IRA limit.
The AICPA Tax and PFP Executive committees sent a joint comment letter in support of these and identifying several additional areas of correction that were needed.