ERTC Marks New Milestones and We Are Here to Support You

Dear Client,

We have important information regarding Employment Retention Tax Credit (ERTC) refunds and backlog of claim processing. Please review all categories below and reach out to your assigned rep for any further support you may need as we navigate through this together.

Insight:

Small businesses throughout the country have reported significant delays in receiving the Employment Retention Tax Credit (ERTC) refund. Here are some of the reasons that have contributed to the delays and have posed a challenge with understanding the status

  • For most companies that applied for this credit, it was taken retroactively – and the only way to apply for this credit retroactively is through a Form 941-X.

  • The Form 941-X is a paper form, and so it must be processed manually.

  • The IRS has been inundated with paper tax forms and it appears that they have fallen significantly behind in processing these documents. Covid, lack of scanner technology and hiring challenges all have contributed to these delays.

  • ERTC credit claims over $200,000 are being reviewed twice by the IRS before being issued.

In a report just issued to Congress, the IRS was found to have more than 21 million unprocessed paper tax forms. 900,000 of which are paper business tax forms.

This backlog has not gone unnoticed by Congress. More than 70 members of Congress have written to the IRS Commissioner to demand action be taken to address the backlog. These issues have been pointed out by both the IRS Taxpayer Advocate and the Treasury Inspector General. While this continues to be a priority with the IRS, we continue to make it our priority to follow up, however please note that this is our experience to date

  • Attempts to call the IRS to check on the progress of your ERTC claim often go unanswered.

  • If the IRS does answer, in many cases, they are not able to track down the paper filing, because it has yet to be imported into the IRS computer system.

No record of the claim appears in the IRS documentation until the claim is processed, including if it was received.

What we are doing to support you:

  • We are monitoring the movement of 20 million plus paper tax forms that are backlogged with the IRS.

    • The IRS has assigned a 1,200 employee “surge team” to try and make inroads and is attempting to hire 10,000 additional employees to help clear out the backlog.

    • At the beginning of 2023, the IRS had a backlog of 440,000 Forms 941-X and as of July 2023, that number is down to around 215,000.

  • Our compliance team is diligently keeping track of updates from the IRS.

  • We continue to train our Service Reps on ERTC so they can assist you with your questions.

  • We will continue to attempt to follow up with the IRS on your ERTC credit claim.

  • When available, we will communicate the following:

    • When your ERTC claim was filed.

    • When the IRS has processed your claim.

When we have a refund amount and when the credit will be issued.

Thank you for your partnership and continued patience. We are in this with you!

Sincerely,

CertiPay