The Internal Revenue Service (IRS) opened its much-anticipated Employee Retention Credit Voluntary Disclosure Program (ERC-VDP) in January 2024. The ERC-VDP is currently set to close on March 22, so eligible business owners only have a limited amount of time to decide whether to file. Here, New Jersey tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, discusses some of the key factors business owners should consider when deciding whether to take advantage of the ERC-VDP.

As the IRS continues to combat an estimated $2 trillion in fraudulent Employee Retention Credit (ERC) claims, it is targeting businesses that improperly claimed the credit through various means. After establishing a withdrawal process for pending claims in October 2023, the IRS sent an “initial round” of disallowance letters in December, and it opened a limited-time ERC Voluntary Disclosure Program (ERC-VDP) a few weeks later.

Facing allegations of Employee Retention Credit (ERC) fraud presents substantial risks for business owners in New Jersey. Combating ERC fraud is a top priority for the Internal Revenue Service (IRS), and business owners accused of ERC fraud can face both civil and criminal penalties. As a result, for those accused of ERC fraud, presenting an effective defense needs to take precedence, and this starts with engaging an experienced New Jersey tax attorney to deal with the IRS.

Kraken, the well-known cryptocurrency exchange, has been ordered by a federal court to disclose customers’ personal information and transaction data to the Internal Revenue Service (IRS). The order comes after Kraken’s prolonged fight to thwart the IRS' “John Doe” summons and after several other cryptocurrency platforms have already been forced (or voluntarily chosen) to comply with similar requests.

Businesses that improperly claimed the Employee Retention Credit (ERC) are facing scrutiny from the Internal Revenue Service (IRS). To help businesses that unknowingly worked with fraudulent promoters and scam artists to submit improper ERC claims, the IRS has announced a process for withdrawing invalid claims before they trigger an audit or investigation. If you think your business may need to file for withdrawal, you should consult with a New Jersey tax lawyer promptly.