U.S. Rep. David Valadao (R-CA) is seeking information from the Internal Revenue Service (IRS) on delays in processing Employee Retention Tax Credit (ERTC) claims.
The ERTC program was created during the COVID-19 pandemic to help businesses keep people employed. Valadao first reached out to IRS Commissioner Danny Werfel in January expressing concerns over the delays in processing and payment of ERTC claims.
While the IRS has made progress since January to pay eligible claims, there are still thousands of small businesses waiting for their claim to be processed and paid.
“Businesses with legitimate ERTC claims deserve prompt processing and payment of their claims. Unfortunately, the IRS has not yet communicated the status of these claims or outlined the process for the analysis needed to complete their processing and payment,” Valadao wrote in a recent letter to Werfel.
In the letter, Valadao asked the IRS to outline the steps it is taking to address these claims. He asked for responses to several questions, including:
• Will the IRS consider extending the 30-day period for taxpayers who received a disallowance letter to submit a protest? If not, why not?
• How is the IRS reviewing the 60 to 70 percent of claims that have moderate level of risk? How is the IRS communicating the status of these claims with taxpayers?
• In August, the IRS announced that 50,000 low-risk claims were moving into processing. Of these claims, how many have been paid?
• Is the IRS working through ERTC cases that the Taxpayer Advocate Service is sending?
“The ERTC program was designed to provide crucial relief to businesses during the pandemic. While the steps the IRS has taken in recent months are essential for addressing these claims, I am concerned that the IRS response has been inadequate,” Valadao wrote in the letter.