IRS Reopens Voluntary Disclosure Program for Businesses with Problematic Employee Retention Credits

The Internal Revenue Service (“IRS”) has recently announced a limited reopening of the Voluntary Disclosure Program to help businesses fix incorrect Employee Retention Credit (“ERC”) claims. The ERC Voluntary Disclosure Program (“VDP”) will run through November 22 and permit businesses an opportunity to correct improper payments at a 15% discount and avoid future audits, penalties, and interest. To underscore the importance of participating in the VDP, the IRS also announced it plans to mail up to 30,000 new letters to reverse or recapture improperly claimed ERC claims. Thousands of additional correspondences will be mailed by the IRS this fall. The limited reopening of the VDP provides an opportunity for those with improper claims to come forward to the IRS and get a discount before the IRS begins enforcement action.

The IRS is currently analyzing ERC claims, intensifying audits and criminal investigations. If your business has filed a questionable ERC claim, now is the time to enter into the VDP to reduce your exposure to significant civil and criminal penalties.

Anthony Diosdi frequently represents taxpayers nationally in controversies before the Internal Revenue Service, United States Tax Court, United States Court of Federal Claims, Federal District Courts, and the Circuit Courts of Appeal. In addition, Anthony Diosdi has written numerous articles on international tax planning and frequently provides continuing educational programs to tax professionals. Anthony Diosdi is a member of the California and Florida bars. He can be reached at 415-318-3990 or adiosdi@sftaxcounsel.com.

This article is not legal or tax advice. If you are in need of legal or tax advice, you should immediately consult a licensed attorney.