The U.S. House of Representatives has passed a bill aimed at preventing and combating fraud under the pandemic-era Employee Retention Credit (ERC) program. If passed, the bill would extend the statute of limitations for imposing ERC-related assessments while increasing the penalties for promoters of fraudulent ERC filing schemes.

The Internal Revenue Service (IRS) launched a limited-time Employee Retention Credit Voluntary Disclosure Program (ERC-VDP) in January 2024. Businesses that improperly claimed the ERC currently have until March 22, 2024 to file applications under the program. Those that submit successful applications can avoid interest and penalties while repaying just 80 percent of their invalid refunds.

The Internal Revenue Service (IRS) is pulling out all the stops to mitigate taxpayer losses under the pandemic-era Employee Retention Credit (ERC) program. With an estimated $2 trillion in fraudulent claims filed, the IRS is targeting both businesses that received fraudulent refunds and businesses that still have fraudulent ERC claims pending. As Virginia tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains, all business owners who claimed the ERC need to ensure that they are making informed decisions in 2024:

For businesses in Virginia that have claimed the Employee Retention Credit (ERC), the risk of facing fraud allegations from the Internal Revenue Service (IRS) is a very real concern. Businesses have filed billions of dollars in fraudulent claims—some intentionally, and some not—and the IRS is now in the process of seeking to recoup as many taxpayer dollars as possible.

More than two years after approving the IRS' “John Doe” summons targeting Kraken customers’ personal information and transaction data, a federal court has compelled Kraken to comply. While Kraken has disputed the IRS' authority to issue the summons, the court that initially authorized the summons in May of 2021 has now stated that Kraken must supply the requested information in order to avoid being held in contempt of court.