New Employee Retention Credit Voluntary Disclosure Program

The IRS has announced a new Employee Retention Credit (ERC) Voluntary Disclosure Program, under which eligible taxpayers can repay only 80% of the gross amount of credit erroneously claimed, while retaining the remaining 20%. (IRS Announcement 2024-3)

Taxpayers that want to participate in the Voluntary Disclosure Program must file Form 15434, Application for Employee Retention Credit Voluntary Disclosure Program, on or before 11:59 pm local time March 22, 2024. Form 15434 must be submitted to the IRS through its Document Upload Tool at:

Eligible taxpayers must meet all four of the following requirements:

  1. The taxpayer cannot be under criminal investigation and they cannot have been notified that the IRS intends to commence a criminal investigation;
  2. The IRS has not received information from a third party alerting the IRS to the participant’s noncompliance, nor has the IRS acquired information directly related to the noncompliance from an enforcement action;
  3. The taxpayer is not under an employment tax examination by the IRS for any tax period for which the taxpayer is applying for the ERC Voluntary Disclosure Program; and
  4. The taxpayer has not previously received a notice and demand for repayment of all or part of the claimed ERC.

Taxpayers whose ERC claims were filed by third-party payers, such as an agent or a professional employer organization, must apply for the Voluntary Disclosure Program through the third-party payer.

For more information on how this voluntary disclosure program works, sign up for Spidell’s 2023/24 Federal and California Tax UpdateClick herefor details.