Judson Mallory Provides Insight on IRS ERC Moratorium Costs and How ERC Claims Collect Interest in The Playbook
July 22, 2024 The IRS's efforts to address Employee Retention Credit (ERC) fraud could lead to billions in interest payments. Since the September 2023 moratorium, 60-70% of 2023 ERC applications were considered too high risk. However, the IRS plans to start processing "low risk" claims but will owe interest on these overpayments. The IRS is grappling with a backlog of 1.4 million claims, and the interest payments could reach up to $3.1 billion annually if half the claims are legitimate. Wiggam Law Partner Judson Mallory highlighted the financial impact, noting interest rates around 7% could result in staggering payouts. According to Mallory, business owners getting paid interest when they get their credit paid out is a silver lining to an extremely long delay. “I suspect the unpaid claims could amount to billions of dollars based on the sheer amount of claims out there that have not been paid out,” Mallory said. “With the interest rates being what they are now, the IRS payouts could be staggering.” Access the full article in The Playbook here.
Jason Wiggam
Founding Partner
Jason is a founding partner of Wiggam Law in Atlanta, Georgia. His practice focuses on representing individuals, businesses, officers, directors, shareholders, and partners in matters concerning the Internal Revenue Service (IRS), the Georgia Department of Revenue, and other state tax departments. He has successfully represented clients in the IRS’s recent crackdowns on syndicated conservation easements and micro-captive insurance disputes. Jason also has significant experience handling IRS tax settlements, tax compliance, appeals representation, offshore foreign bank reporting compliance, audit representation from responding to IRS audit letters through to IRS audit reconsiderations if necessary, innocent spouse relief, IRS levy and IRS garnishment releases, penalty waivers/abatements, and lien releases/withdrawal.
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