Navigating The IRS Employee Retention Credit Voluntary Disclosure Program

On December 21, 2023, the Internal Revenue Service ("IRS") announced (IR-2023-247) a voluntary disclosure program ("VDP") for employers that received questionable employee retention tax credits ("ERTC"). Specifically, this new VDP seeks to assist these employers while providing them with an opportunity to voluntarily repay only eighty percent (80%) of the ERTC received and potentially avoid both penalties and interest, while being allowed to keep twenty percent (20%) of the ERTC received. The IRS has been clear that they are concerned about fraudulent or inaccurate ERTC claims prepared by so-called "ERTC mills" and they will be aggressively auditing these claims. If you used one of these ERTC mills, this program may be particularly attractive to you. One concern we have identified are claims that used a partial suspension of operations due to a government order that included all of the second quarter and/or third quarter of 2021 after many state government orders