Washington (September 23, 2024) - Senator Edward J. Markey (D-Mass.), a senior member of the Senate Small Business and Entrepreneurship Committee, and Senator Elizabeth Warren (D-Mass.) today sent a letter to Internal Revenue Service (IRS) Commissioner Daniel Werfel urging the IRS to expedite payment of Employee Retention Tax Credit (ERC) claims, prioritizing low-risk claims from taxpayers experiencing financial hardship. After the onset of the COVID-19 pandemic, the ERC was an important lifeline that kept workers employed during the difficult economic downturn.
The lawmakers wrote, “On September 14, 2023, the IRS imposed a moratorium on processing new claims. On August 8, 2024, the agency announced that, going forward, it would start processing claims filed between September 14, 2023, and January 31, 2024. It also disclosed that it had identified 50,000 valid ERC claims, would expedite those payments, and would pay another large block of low-risk claims this fall. Although we support the agency’s effort to prevent improper payments, both the slow pace of review and the moratorium have caused significant delays and hardship for those with legitimate claims. During the moratorium, the IRS backlog doubled to around 1.4 million claims. The long delay and backlog have put many nonprofits and businesses in jeopardy of shutting down before the IRS even considers their ERC claim.”
The lawmakers continued, “The agency’s recent announcements are a positive step towards providing the relief Congress intended for taxpayer employers. But there are a significant number of claims that the IRS has identified as low risk, which the IRS is not currently processing. This means that many claimants likely will have to wait several more months to receive the benefit to which they are entitled. We believe that, as soon as possible, the IRS should approve and pay low-risk ERC claims from struggling nonprofits and small businesses. Immediately approving and paying low-risk ERC claims would greatly benefit the hundreds of thousands who are still operating in a challenging economic environment.”
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