After months of talk, the IRS now appears to be taking action on Employee Retention Credit (ERC) audits. The IRS is about to send the first wave of ERC audit letters to 20,000 businesses. Many practitioners speculate that the sheer volume of ERC audits puts enormous pressure on the IRS to execute and close cases quickly. It will be important for businesses to commit adequate resources to gathering relevant data and working with the IRS to resolve the audit in an acceptable manner.
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Employee Retention Credit Audits Heating Up
More than 20,000 employee retention credit claimants are about to be disappointed when they open their mail in the coming days. The IRS announced December 6 that it’s sending out a first wave of letters informing more than 20,000 taxpayers that their ERC claims have been denied, either because the business entity didn’t exist during the covered period or because it didn’t have paid employees at the time.