Tax Blog: OCTOBER 2024 ERC UPDATE

Blog Post: IRS Press Release Promises 50,000 ERC Checks – But What About the 2 Million-Claim Backlog?

The IRS recently announced it will be sending out 50,000 Employee Retention Credit (ERC) checks to businesses eagerly awaiting their refunds. While this sounds like progress on the surface, the reality is far less rosy. According to the Taxpayer Advocate Service (TAS), the IRS is currently sitting on a backlog of nearly 2 million unprocessed ERC claims. So, while 50,000 checks may sound like a big number, it's barely scratching the surface.

A 2.5% Drop in the Ocean

Let's put this into perspective. The IRS is committing to send out 50,000 checks—but that represents just 2.5% of the total ERC claims that are still pending. With such a monumental backlog, the IRS's current processing speed of around 15,000 claims per month makes the situation even more dire. If the agency continues at this rate, it would take over 11 years to pay out all the claims in the backlog.

Even if they manage to double or triple their current pace, it would still take years to process the remaining claims, leaving thousands of businesses in limbo, waiting for much-needed funds.

What Are Your Options?

If you’re one of the businesses still waiting for your ERC refund, you likely can’t afford to wait years for the IRS to work through the backlog. Luckily, there are two viable strategies that can significantly speed up the process and help you access your cash sooner.

1. Sell Your ERC Claim to Investors

One of the quickest ways to get cash in hand is to sell your ERC claim to investors. While you’ll take a 25% haircut on the value of your claim, the entire process can be expedited in as little as two weeks. This option allows businesses to access much-needed funds without waiting for the IRS to catch up. For companies facing cash flow issues, selling your claim is often the fastest and most effective way to unlock the money you’re owed.

2. Hire a Firm to Expedite Your ERC Claim

Another option is to hire a specialized firm—like ours—to help navigate the IRS bureaucracy and push your claim forward. While we can’t promise the two-week turnaround that comes with selling your claim, we can still expedite the process significantly, often cutting the wait time down to just a few months, instead of the years it might take otherwise. Our team has the expertise and experience to work directly with the IRS, ensuring your claim doesn’t get lost in the shuffle.

The Bottom Line

The IRS’s promise of 50,000 checks is a small step in the right direction, but it barely addresses the mountain of claims still pending. At the current rate, many businesses could be waiting years for their refunds. If waiting that long isn’t an option for your business, the best course of action is to either sell your claim to investors for immediate cash or work with a firm like ours to expedite the process.

Either way, you don’t have to sit back and wait—there are solutions available that can get your ERC refund in your hands faster. Reach out to us today to discuss your options and get started on securing your refund.