Navigate the Employee Retention Credit Claims with Freese, Peralez, & Associates

by | Feb 13, 2024

Introducing the IRS's New Voluntary Disclosure Program

In a significant move, the Internal Revenue Service (IRS) has unveiled a new Voluntary Disclosure Program (VDP) for businesses to address any inaccuracies in their Employee Retention Credit (ERC) claims. This initiative, part of the IRS's commitment to maintaining integrity in tax practices, offers a beneficial route for businesses to correct their claims and repay a reduced amount of the received credits. Freese, Peralez, & Associates, a trusted name in business tax advisory, is poised to guide businesses through this new process.

Understanding the VDP and Its Benefits

The VDP, effective until March 22, 2024, allows businesses to rectify overclaimed ERCs by repaying 80% of the received amount. This concession is particularly relevant as many businesses may have received less than the full claim amount due to fees charged by ERC promoters. Importantly, the IRS will not impose additional penalties or interest on these repayments, a relief underscored by Freese, Peralez, & Associates as an opportunity for businesses to align their tax practices with legal standards.

A Separate Withdrawal Program for Pending Claims

Businesses with pending ERC claims can also benefit from the IRS's withdrawal program. This allows for the withdrawal of a pending ERC claim without any penalties or interest. Over $100 million has already been withdrawn, signaling the IRS's proactive stance against erroneous ERC claims.

Eligibility and Application Process for VDP

To participate in the VDP, employers must disclose details about any advisors involved in their ERC claims. This includes sharing advisor contact information and services provided. Additional eligibility criteria include not being under IRS scrutiny or criminal investigation for the relevant tax period, and not having already received an IRS notice for ERC repayment.

Employers interested in the VDP should complete Form 15434, Application for Employee Retention Credit Voluntary Disclosure Program, and submit it using the IRS Document Upload Tool. Freese, Peralez, & Associates can assist in this application process, ensuring correct and compliant submissions.

Broader IRS Initiatives Against ERC Fraud

The VDP is part of the IRS's comprehensive strategy to combat ERC fraud. With ongoing audits, criminal investigations, and a moratorium on new ERC claims, the IRS is intensifying its efforts to ensure the integrity of ERC claims.

Advisory for Employers on ERC Claims

Freese, Peralez, & Associates strongly advises employers to be vigilant and consult with experienced tax professionals regarding their ERC claims. Given the complexities and potential pitfalls associated with ERC claims, professional guidance is crucial to avoid being misled by aggressive marketing tactics.

The Role of the ERC

When accurately claimed, the ERC serves as a valuable refundable tax credit for businesses that sustained employee wages during pandemic-related operational disruptions or significant revenue declines. Freese, Peralez, & Associates are experts in navigating these tax credits, ensuring businesses receive the benefits they rightly deserve.

Take Action with Expert Guidance

For businesses navigating the complexities of the ERC and the new VDP, Freese, Peralez, & Associates offer comprehensive support and expert advice. Visit or call Freese, Peralez, & Associates to ensure your business remains compliant and benefits from the available tax credits. Their expertise in tax law and dedication to client success make them the ideal partner in these challenging financial landscapes.