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ERC Voluntary Disclosure

Interested employers must apply to the second ERC Voluntary Disclosure Program by Nov. 22, 2024. Applicants that the IRS accepts into the program will need to repay only 85% of the credits they received. This second round of the program is open for tax periods in 2021. Employers can’t use the second VDP to disclose and repay ERC money from tax periods in 2020

If the IRS paid interest on the employer’s ERC refund claim, the employer doesn’t need to repay that interest. Employers who are unable to repay the required 85% of the credit may be considered for an Installment Agreement on a case-by-case basis, pending submission and review of Form 433-B, Collection Information Statement for Businesses PDF, and all required supporting documentation. Form 433-B is available on IRS.gov.

The IRS will not charge program participants interest or penalties on any credits they timely repay. However, if an employer can’t repay the required 85% of the credit at the time they sign their closing agreement, they’ll be required to pay penalties and interest in connection with an alternative payment arrangement such as an installment agreement.

To qualify for this program, employers must provide the IRS with the names, addresses, telephone numbers and details about the services provided by any advisors or tax preparers who advised or assisted them with their claims.

The IRS has provided a set of Frequently Asked Questions about the second ERC Voluntary Disclosure Program to help employers understand the terms of the program.

Reach out for support and with questions.

What is the Voluntary Disclosure Program?

The Employee Retention Credit Voluntary Disclosure Program offers a lifeline to businesses that mistakenly claimed the Employee Retention Credit (ERC), aiming to prevent severe penalties and potential criminal charges from unintentional misfiling or incorrect claims. This program is open to businesses not currently facing criminal investigations or employment tax audits, who have inadvertently received ERC credits or refunds.

There's a critical deadline of November 22, 2024, to apply for a reduced repayment of only 85% of the received ERC. Missing this deadline, however, could lead to increased repayments and penalties.

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