First in Punchbowl News: Lawmakers are pushing the IRS to speed up processing for a pandemic-era relief program so that small businesses can get their funds.
Rep. Claudia Tenney (R-N.Y.), a member of the House Ways and Means Committee, and Sen. Tommy Tuberville (R-Ala.) each sent similar letters to the IRS pressing the agency on when it will resume processing new employee retention tax credit claims and how it plans to deal with a backlog that’s piled up, according to copies of the letters we obtained.
Read Tenney’s letter here and Tuberville’s here.
Both Republicans argue the IRS’ slow pace for doling out credits could lead small- and medium-sized businesses having to lay off workers or even close.
“While the public health concerns of the pandemic have largely ended, for many hard-hit industries and businesses the economic aftermath has not only persisted, but grown worse, severely delaying and regressing the anticipated economic recovery that American businesses were hoping for once COVID-19 abated,” Tenney wrote.
Tuberville wrote that “each day that passes with outstanding ERC claims unprocessed is a disservice to taxpayers and a threat to small- and medium-sized businesses.”
Here’s the wrinkle: The employee retention tax credit became a magnet for scams and fraud. The credit was meant to help smaller businesses and nonprofits stay afloat and keep workers on payroll during the pandemic. It ended after 2021, but businesses can still file claims for the aid.
The rampant misuse of the credit led Senate Finance Committee Chair Ron Wyden (D-Ore.) and House Ways and Means Committee Chair Jason Smith (R-Mo.) to propose cutting off claims early. That would’ve provided nearly $79 billion in offsets for the duo’s tax deal, but that bill is going nowhere in the Senate.
The IRS has taken its own steps to battle fraud, including a pause on processing new credit claims.
Tenney wrote in the letter that fraud in the program shouldn’t be tolerated. Here’s what she said on IRS delays:
The credit has plenty of fans in Congress, but scammers’ success exploiting it made all things employee retention tax credit trickier.
