Did You File an Incorrect ERTC Claim? Here’s How to Withdraw

December 5, 2023
Dayes Law Firm

In September, an immediate moratorium on processing new Employee Retention Tax Credit (ERTC/ERC) claims was announced by the IRS. The announcement came as a result of concerns about “a flood of ineligible ERC claims,” the federal agency noted.

If you think you might have filed or have been scammed into filing an incorrect ERTC claim on behalf of your business, the good news is, there is a process in place to withdraw such a claim. 

How to Withdraw an Incorrect ERTC Claim 

On October 19, the IRS announced the details of a withdrawal process to assist business owners who filed an ERTC claim and are worried about its eligibility. 

“This new withdrawal option allows certain employers that filed an ERC claim but have not yet received a refund to withdraw their submission and avoid future repayment, interest, and penalties,” the agency revealed. 

“Employers that submitted an ERC claim that’s still being processed can withdraw their claim and avoid the possibility of getting a refund for which they’re ineligible.”

Unfortunately, the IRS has already had to open hundreds of criminal cases into “dubious claims” for the program, and thousands of ERC claims have already been referred for audit. That’s in part because of third-party promoters scamming some business owners into claiming the Employee Retention Tax Credit when they’re not actually eligible to do so. 

“We want to give these taxpayers a way out,” IRS Commissioner Danny Werfel said. 

“The withdrawal option allows employers with pending claims to avoid future problems, and we encourage them to closely review the withdrawal option and the requirements. We continue to urge taxpayers to consult with a trusted tax professional rather than a marketing company about this complex tax credit.”

To withdraw an inaccurate ERTC claim, taxpayers should follow the special instructions available at IRS.gov/withdrawmyerc. There are a few particulars to keep in mind, like whether you and your business worked with a professional payroll company, and whether or not you’ve already received notice of an audit. 

Employee Retention Tax Credit Claim Withdrawal Instructions 

According to the IRS, “taxpayers whose professional payroll company filed their ERC claim should consult with the payroll company” in order to withdraw their claim. The payroll company may have to submit the withdrawal request on behalf of the taxpayer.

Additionally, “Taxpayers who filed their ERC claims themselves, haven’t received, cashed or deposited a refund check and have not been notified their claim is under audit should fax withdrawal requests to the IRS using computer or mobile device.” In fact, the IRS has even set up a special fax line to receive these requests. 

“Taxpayers who are unable to fax their withdrawal using a computer or mobile device can mail their request,” according to the agency, but that will obviously be a longer process. 

Employers who have been told they are under audit in regard to their ERTC claim can send their withdrawal request “to the assigned examiner or respond to the audit notice if no examiner has been assigned,” the IRS reported. 

Finally, even those who already received a refund check but haven’t yet deposited or cashed it can still withdraw their claim. The taxpayer in question can mail the voided check with their withdrawal request using the instructions listed at the same link, IRS.gov/withdrawmyerc.

Working with Tax Professionals on the ERTC

If you haven’t yet applied for the ERTC and are concerned about whether or not you’re eligible, or even if you know you’re eligible but want to be sure you turn in an accurate claim, you might want to consider working with a reputable team of tax professionals to complete your claim. 

The team at Dayes Law Firm has already helped many businesses apply for the Employee Retention Tax Credit. To date, our team has assisted businesses in filing for over $250 million in ERTC claims. We help more businesses all the time and would be happy to assist you with your application. 

To learn more, contact us for a free, no-obligation consultation to discuss your business and its unique circumstances. There is no requirement to work with our firm after this initial evaluation – we just want the chance to prove why we are the right team to work with on your ERTC claim. Give us a call today to see how we can help!