The Internal Revenue Service (IRS) recently issued three News Releases that are noteworthy for Virginia business owners and other taxpayers in the Commonwealth. These News Releases highlight some of the IRS’ current enforcement priorities—and the efforts it is actively undertaking to combat federal tax fraud, evasion and abuse. Virginia tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains.

The Internal Revenue Service (IRS) recently issued a News Release highlighting its continued efforts to target invalid Employee Retention Credit (ERC) claims. The News Release states that the IRS’ ERC-related enforcement efforts have “topped more than $2 billion since last fall” and advises that “[b]usinesses should act soon to resolve incorrect claims and avoid future issues such as audits, repayment, penalties, and interest.” The IRS also used its News Release to identify several new “warning signs” for potentially fraudulent ERC claims, as Virginia tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains.

The Internal Revenue Service (IRS) is conducting penalty audits to enforce the Affordable Care Act’s (ACA) health insurance mandates for employers. These audits can expose employers to substantial penalties, so a strategic defense is critical. As Virginia IRS attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains, building a strategic defense starts with understanding what (if anything) the IRS is likely to uncover during the audit process.

The Internal Revenue Service (IRS) recently announced that it is keeping the moratorium on new Employee Retention Credit (ERC) filings in place so that it can focus on fraud enforcement. The IRS has a substantial backlog of pre-moratorium ERC claims to review, and while it anticipates restarting payments on valid claims “later this summer,” its primary focus is on uncovering and prosecuting ERC-related fraud. Virginia IRS tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains what this means for those who have concerns about their ERC filings.

The IRS had a backlog of approximately 1.4 million Employee Retention Credit (ERC) claims as of May 2024. This was one of several revelations that came to light when the IRS was forced to respond to a lawsuit challenging its moratorium on new ERC filings earlier this year. In its response, the IRS also made clear that it is processing pending claims “slowly and judiciously” in order to identify potentially fraudulent claims that require further scrutiny.