IRS opens new round of ERC voluntary disclosure ending November 22

 Eligibility criteria

• Employers who previously claimed and received ERC but have determined they were not eligible for ERC for some or all quarters in 2021
• Not under criminal investigation and have not been notified of the intent to begin investigation
• Not under employment tax examination (audit) for any tax period for which taxpayer is applying for second ERC-VDP
• Taxpayer has not received Letter 6577-C from the IRS informing of intent to recapture ERC for any tax period for which taxpayer is applying for second ERC-VDP
• Taxpayer has not received notice and demand for payment of all or part of the claimed ERC
• Taxpayer has not previously filed an amended employment tax return to eliminate the ERC claim

 Benefits of participation

• Repayment of ERC is reduced to 85%.
• No interest or penalties will be assessed, provided full repayment is made no later than when the signed ERC-VDA closing agreement is sent to the IRS.
• The 15% payment reduction is not taxable income.

 ERC disclosure process

• Employers must submit Form 15434, Application for Employee Retention Credit Voluntary Disclosure Program, by November 22, 2024.
• If filing for the first or second quarter of 2021, Form SS-10, Consent to Extend Time to Assess Employment Taxes, must be submitted with Form 15434.
• Applicants must use online filing at IRS.gov/dutand click the blue “Use the Document Upload Tool” box.
• The IRS recommends advance payment of ERC amounts at the time of application using the Electronic Federal Tax Payment System(EFTPS) but they do not require it.
• The IRS will review the application package and verify eligibility for the ERC-VDP. If approved, the IRS will provide a letter with next steps and a closing agreement.
• Unless approved for an installment agreement, full payment of anyamount due must be made at the time of signing the ERC-VDP closing agreement.