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ARTICLE · 20 AUGUST 2024

IRS Announces Second Voluntary Disclosure Program To Resolve Improper Employee Retention Credit Claims

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On Aug. 15, 2024, the IRS announced a second voluntary disclosure agreement (VDA) program for companies that claimed the employee retention credit (ERC) enacted under the CARES Act. Companies that may have already received ERC refunds from improper claims should consider taking advantage of this VDA program before the IRS identifies the erroneous refund.

United StatesTax
Marvin Kirsner
Marvin Kirsner

On Aug. 15, 2024, the IRS announced a second voluntary disclosure agreement (VDA) program for companies that claimed the employee retention credit (ERC) enacted under the CARES Act. Companies that may have already received ERC refunds from improper claims should consider taking advantage of this VDA program before the IRS identifies the erroneous refund.

Background

This pandemic-era program provided a tax credit for wages paid between March 13, 2020, and Sept. 30, 2021, if (among other requirements) a company fully or partially suspended business operations due to a COVID-related government order or experienced a significant decline in gross receipts. The maximum credit allowed—assuming the company met numerous requirements —was $26,0000 per employee. However, many companies filed for the ERC even though they might not have been eligible for some or all of the credit. The IRS announced that the vast majority of pending ERC claims were improper and indicated it is

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