A rash of bogus ERC claims in recent months has prompted the IRS to put the program on hold through at least the end of 2023.

A rash of bogus employee retention credit (ERC) claims in recent months has prompted the IRS to put the program on hold through at least Dec. 31.

IRS Commissioner Danny Werfel ordered the immediate moratorium today and said the agency “could no longer tolerate growing evidence of questionable claims pouring in.”

“The IRS is increasingly alarmed about honest small business owners being scammed by unscrupulous actors,” he said in a press release. “The further we get from the pandemic, the further we see the good intentions of this important program abused. The continued aggressive marketing of these schemes is harming well-meaning businesses and delaying the payment of legitimate claims, which makes it harder to run the rest of the tax system. This harms all taxpayers, not just ERC applicants.”

The refundable tax credit, which was authorized by the $2.2 trillion coronavirus package known as the Cares Act, aimed to motivate employers to keep workers on staff during the early days of the pandemic as unemployment rates surged. The IRS has received more than 3.5 million employee retention credit claims since the program was enacted.

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