IRS claws back money given to businesses under fraud-ridden COVID-era tax credit program

By MAE ANDERSON
AP Business Writer

NEW YORK (AP) — The IRS says it’s making progress with initiatives to claw back money improperly distributed under the Employee Retention Credit. The ERC was designed to help businesses retain employees during pandemic-era shutdowns, but it quickly became a magnet for fraud. Its complex eligibility rules allowed scammers to target small businesses, offering help applying for the ERC for a fee — even if the business didn’t qualify. The IRS said it received $225 million from a voluntary disclosure program that let small businesses that thought they received the credit in error give back the money and keep 20%. The program ended on March 22.