IRS pauses processing of new Employee Retention Credit claims
On Sept. 14, the IRS announced that at least through the end of the year, it will issue a moratorium on processing new claims for the Employee Retention Credit because of an explosion of false claims marketed to businesses by scammers. The agency will continue to process existing claims but said wait times are certain to increase as claims undergo “detailed compliance reviews.”
With the stricter compliance reviews in place during this period, existing ERC claims will go from a standard processing goal of 90 days to 180 days—and much longer if the claim faces further review or audit. The IRS also may seek additional documentation from taxpayers to ensure they are legitimate claims.
The IRS issued a list of red flags to watch out for regarding aggressive marketing.
The ERC is complex, and there are specific eligibility requirements for claiming the ERC. Employers can claim the ERC on an original or amended employment tax return for qualified wages paid between March 13, 2020, and Dec. 31, 2021. However, to be eligible, employers must have sustained a full or partial suspension of operations resulting from orders from an appropriate governmental authority limiting commerce, travel or group meetings because of COVID-19 during 2020 or the first three quarters of 2021; experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021; or qualified as a recovery startup business for the third or fourth quarters of 2021.
Department of Homeland Security issues H-2B proposed rule
On Sept. 20, the Department of Homeland Security published a notice of proposed rulemaking designed to modernize and improve the H-2A temporary agricultural and H-2B temporary nonagricultural worker programs. Through this proposed rule, DHS seeks to strengthen worker protections and the integrity of the visa programs and improve program efficiency. In addition, the agency is proposing greater flexibility for H-2 workers, in part by extending grace periods during which workers may seek new employment, prepare for departure from the U.S. or seek a change of status to a different nonimmigrant classification.
To further improve the programs and enhance protection for workers, the proposal would clarify existing requirements regarding employer-imposed fees that are prohibited under current regulations. This rulemaking also offers benefits to employers, including allowing petitioners facing worker shortages to have H-2 workers who are already in the U.S work for a new employer while petitions are pending. DHS will accept public comments regarding the proposed rule, which will be due Nov. 20.
Senate confirms Wilcox for another term on National Labor Relations Board
The Senate recently voted to confirm Democratic appointee Gwynne Wilcox to serve another term on the National Labor Relations Board. Wilcox’s nomination was approved on a final vote of 50-49, with Sen. Lisa Murkowski (R-Ark.) being the lone Republican to vote in favor and Sen. Joe Manchin (D-W.Va.) being the lone Democrat voting against the nomination. She was sworn in for a second term Sept. 11. The board now will have a guaranteed 3-1 Democratic majority that will last through December 2024, when current Chair Lauren McFerran’s term expires. With Wilcox rejoining the board, it is expected the agency soon will finalize its rule to modify the definition of what constitutes a joint employer under the National Labor Relations Act.