Congress presses IRS on ERTC processing and tax penalty relief

Lawmakers are asking the Internal Revenue Service to expedite the processing of Employee Retention Tax Credits and not to penalize small businesses for incorrectly paying their estimated quarterly taxes as they await their claims.

During a hearing Thursday before the House Ways and Means Oversight Subcommittee, Rep. Carol Miller, D-West Virginia, asked IRS Commissioner Charles Rettig about the tax credits. She acknowledged that in the bipartisan infrastructure bill that Congress passed last November, the legislation prematurely ended the ERTC in the third quarter, on Sept. 30, for most businesses, when it was originally supposed to last through the end of the year. Miller introduced bipartisan legislation last December to reinstate the tax credit for the fourth quarter, but it has yet to advance. Meanwhile, many small businesses have been waiting for their ERTC claims to be processed from last year, even those dating back before the fourth quarter.

“The ERTC was unfairly cut short in the fourth quarter of 2021 and many of the small businesses and nonprofits are still waiting on relief from the third, the second and even the first quarter of last year while processing was delayed eight to 10 months,” said Miller. “When Congress authorized this program, it was designated to be emergency relief. Receiving the advance payment of this credit could mean life or death for small businesses and the nonprofits in every single congressional district. So, Mr. Rettig, when the IRS created successful processes to ensure individuals could receive direct payments during the pandemic, explain why the IRS handles ERTC processing like a normal piece of correspondence and you do not have the procedure to prioritize these credits?”