CHARLOTTE, N.C. — The extension deadline to file your taxes has ended, but that's not the only thing on the Internal Revenue Service’s radar.
The IRS says it has received a number of questionable claims, so much so that it's pumping the breaks on a particular tax credit.
What You Need To Know
- The IRS stopped the Employee Retention Credit through the end of 2023
- The Better Business Bureau says this comes after the IRS received “questionable claims”
- The BBB reported several tax refund offices have closed the doors since the moratorium started after getting identified as "bad actors"
During the pandemic, small businesses that lost money and/or continued to pay their employees, qualified for tax breaks under the Employee Retention Credit. But, the IRS is putting a stop on that credit through the end of the year.
Many of these claims have been flagged by the Better Business Bureau as well since there’s been some aggressive marketing circulating to ineligible applicants.
President and CEO of the BBB of the Southern Piedmont and Western North Carolina Tom Bartholomy says tax offices played a big role in misleading taxpayers.
“Some of the major tax refund services that popped up around this are now closing their doors, because they were identified as bad actors,” he said, adding that he’s been a target himself.
“I’ve been personally contacted at least 12 times in just the last several months from organizations and individuals saying you can qualify for up to $200,000 with this type of tax credit,” he said.
The ERC, which came out of the pandemic, is unprecedented and makes taxpayers “ripe pickings” for scammers, according to Bartholomy.
The moratorium will last at least through the end of 2023.
The IRS says claims filed before the moratorium will still get processed, but at a much slower rate — going from taking about 90 days to about 180 days to process. Reviewing claims could take even longer if they require an audit or additional documentation.