December 21, 2023

The Internal Revenue Service (IRS) launched a new Voluntary Disclosure Program to help businesses who want to pay back the money they received after filing Employee Retention Tax Credit (ERC) claims in error. The IRS also continues to urge employers with pending ERC claims to consider a separate withdrawal program that allows them to remove a pending ERC claim with no interest or penalty.

Interested employers must apply to the ERC Voluntary Disclosure Program by March 22, 2024. Those that the IRS accepts into the program will need to repay only 80% of the credit they received. If the IRS paid interest on the employe’s ERC refund claim, the employer does not need to repay that interest. Employers who are unable to repay the required 80% of the credit may be considered for an installment agreement on a case-by-case basis, pending submission and review of a Form 433-B, Collection Information Statement for Businesses and all required supporting documentation. The IRS will not charge program participants interest or penalties on any credits they repay. However, if the employer is unable to repay the required 80% of the credit at the time of signing their closing agreement, then the employer will be required to pay penalties and interest in connection with entering into an installment agreement.

To qualify for this program, the employer must provide the IRS with the names, addresses and telephone numbers of any advisors or tax preparers who advised or assisted them with their claim and details about the services provided. Further qualifications and program details are listed in Announcement 2024-3. To apply, the employer must first file Form 15434, Application for Employee Retention Credit Voluntary Disclosure Program and submit it using the IRS Document Upload Tool. 

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