The IRS's Sept. 14 announcement drew a sharp line between new and already-filed Employee Retention Credit claims: the agency stopped processing new claims immediately through at least Dec. 31, but said it would continue work on claims submitted before the moratorium. The pause was a processing measure, not cancellation of the credit or an end to all payouts. [story-s1]

For pending claims, the IRS said stricter compliance review could stretch its normal 90-day processing goal to 180 days or longer, and that payouts would continue at a slower pace. The agency cited audit referrals, criminal investigations and concerns that aggressive marketing was encouraging businesses to file claims that might not qualify. It also warned that businesses could face repayment, penalties or interest for improper claims. [story-s1]

The announcement matters operationally because the credit applied to qualifying wages paid from March 13, 2020, through Dec. 31, 2021—not to any employer simply approached by a promoter. The IRS described eligibility in terms of qualifying government-ordered suspensions, specified declines in gross receipts, or recovery-startup status in designated quarters. Its practical message was to verify eligibility independently and consult a tax professional familiar with the detailed rules before acting on a sales pitch. [story-s1]

For firms already waiting on a claim, the immediate implication was delay and scrutiny rather than an automatic denial. The agency said it could seek more documentation and announced it was developing a withdrawal route for unpaid claims it considered improper. Those were the IRS's stated plans at the time; this article describes the September 2023 announcement, not current tax guidance. [story-s1]

Source documents

  1. To protect taxpayers from scams, IRS orders immediate stop to new Employee Retention Credit processing amid surge of questionable claims; concerns from tax pros | Internal Revenue Servicehttps://www.irs.gov/newsroom/to-protect-taxpayers-from-scams-irs-orders-immediate-stop-to-new-employee-retention-credit-processing-amid-surge-of-questionable-claims-concerns-from-tax-pros