Scarinci Hollenbeck wants its clients to know that if you applied for an ERC and have any doubts about the veracity of your claim, the time to act is now. The Internal Revenue Service (IRS) is carefully scrutinizing ERC claims because they have detected considerable fraud caused in part by promoters of this credit. There is currently legislation on the table to end the ERC program at the end of this month (January 2024), rather than the original date in 2025. The legislation also would extend the statute of limitations on ERC audits from five years to six years. Considering the interest and penalty that could accrue over six years, careful consideration should be given to what, if any, action should be taken at this time.
For employers who made legitimate ERC claims based on a thorough analysis of the ERC rules and their applicability to that employer, the ERC is a valid credit, designed to help those who continued to pay their employees through the pandemic, despite difficult economic challenges. If, however, you made an ERC claim and are concerned about potential future ramifications, there are currently two programs in place that you might consider taking advantage of, depending on your specific circumstances. Each program has specific qualification requirements, the details of which are not discussed here.
For companies that submitted ERC claims and have either not gotten their check from the IRS or have the check, but have not cashed it, you may be eligible to simply withdraw your claim. To date, the IRS has not put a deadline on this program, but at some point, they will end the current moratorium on processing ERC claims and get through all that have been submitted. It is unclear what the IRS will do at that point, but it could be that this opportunity will be lost then.
For companies that received the credit from the IRS, but are ineligible, you might consider the IRS Voluntary Disclosure program. Under this program, you are required to return 80 percent of the amount that you received and fully cooperate with the IRS. This means filling out a specific form that identifies all individuals and entities that helped you determine and claim the credit. THIS PROGRAM IS ONLY OPEN THROUGH MARCH 22, 2024! After the program ends, you are subject to possible audits relative to your ERC credit. If it is determined that you were not eligible for the credit, you will be required to repay 100 percent of the tax, plus interest and penalty.
Please contact us if you have any questions about this program or if you have any concerns about your ERC claim.
The Intersection of SEQRA Reform and New York’s Updated Building and Energy Codes: Impacts on Project Planning
As discussed in prior updates, Governor Hochul’s administration has proposed targeted adjustments to the State Environmental Quality Review Act (SEQRA) to reduce procedural delay for certain housing projects that do not present significant environmental impacts. These proposals are part of the Governor’s 2026 agenda and include targeted SEQRA exemptions, geographic eligibility limits, floodplain exclusions, and […]
Proposed SEQRA Updates Aim to Accelerate Housing While Maintaining Environmental Standards
New York State is pursuing a significant reform initiative aimed at reducing procedural delays associated with the State Environmental Quality Review Act (SEQRA) for certain housing projects. The proposal, which is part of Governor Kathy Hochul’s 2026 State of the State agenda under the “Let Them Build” initiative, seeks to create targeted exemptions from SEQRA […]
New Jersey Enacts Comprehensive Hemp-Derived Cannabinoid Product Framework: What Businesses Need to Know
On January 12, Governor Phil Murphy signed S4509 into law, ushering in a sweeping regulatory framework for hemp-derived cannabinoid products in New Jersey. The statute repeals prior provisions governing intoxicating hemp and aligns state law with newly enacted federal standards under 7 U.S.C. §1639o. This development marks a significant shift for manufacturers, retailers, and distributors […]
New AI Executive Order: What It Means for AI Regulation
On December 11, 2025, President Donald J. Trump signed an executive order titled Ensuring a National Policy Framework for Artificial Intelligence (Executive Order). According to the Trump Administration, the goal is to create a uniform federal approach to AI policy and reduce conflicting rules across different states. For businesses operating in the AI industry, the […]
A Look Back at Key 2025 Changes to Delaware Corporation Law
Senate Bill 21 This bill was enacted largely in response to high-profile litigation, such as In re Match Group (In re Match Grp., Inc. Deriv. Litig., 315 A.3d 446 (Del. 2024)) and TripAdvisor (Maffei v. Palkon, 2025 WL 384054 (Del. Feb. 4, 2025)) and to stem the recent tide of Delaware companies reincorporating in Neveda […]
New York Corporate Transparency Act: What You Need to Know for 2026
The New York Corporate Transparency Act (NYCTA) WILL NOT apply to US-registered LLCs. In recent years, there has been significant interest in identifying the “beneficial owners” of U.S. businesses to combat perceived financial crimes such as money laundering, terrorism financing, and tax fraud by ending the use of anonymous shell companies. This led to the […]
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