The IRS has issued a memorandum that temporarily halts the processing of Employee Retention Credit (ERC) claims, necessitating business owners to delve into the complexities of the tax code.

The focus of the memorandum is on scrutinizing businesses' eligibility for ERC, particularly in relation to supply chain disruptions. The key criterion for ERC eligibility is not just the experience of supply chain disruptions but whether they led to a genuine suspension of business operations, attributable to a governmental order.

While the statute governing ERC eligibility lacks explicit mention of supply chain disruptions, an exception exists if suppliers suspend operations due to a government order. Strategies for optimizing ERC claims include thorough documentation, avoiding assumptions, considering timing, and seeking professional guidance. Contact us if you would like to schedule a consultation!

Despite the challenges posed by the IRS memorandum, businesses are encouraged to view it as a temporary obstacle and continue pursuing ERCs as a valuable resource for financial relief in the face of pandemic-induced setbacks. For more information click the link!

https://www.forbes.com/sites/forbesfinancecouncil/2023/12/19/what-the-irs-erc-memorandum-means-and-how-to-optimize-your-claim/?sh=7cb3ab7a7d5b