IRS finds most of 1 million credit claims may be improper

The IRS reviewed 1 million claims for the Employee Retention Credit totaling $86 billion and found that the majority are at risk of being improper due to fraud. Scammers exploited the complex eligibility rules to target small businesses, resulting in many erroneous claims. The IRS plans to deny billions of dollars in improper claims and issue payments to legitimate taxpayers. Around 10% to 20% of claims are clearly erroneous, while 60% to 70% pose an unacceptable risk of being improper. Payments for low-risk claims will begin later this summer, and the moratorium on new claims submitted after Sept. 14, 2023, will continue.