COVID Fraud and IRS Delays: Impact on Small Businesses
The Impact of COVID Fraud on Small Businesses
The effects of COVID fraud are increasingly felt, especially by honest small businesses struggling with the lengthy delays by the IRS in processing Employee Retention Tax Credit claims. Despite the federal government’s promise to reimburse businesses that maintained payroll during the pandemic, many have yet to receive their deserved assistance.
Promises Made, Promises Broken
In hundreds of thousands of instances, the government’s commitment has not been honored, leaving small businesses in dire financial situations. IRS Commissioner Danny Werfel acknowledges that 10-20% of outstanding claims show a low risk of fraud, yet substantial delays continue to plague the processing of legitimate requests.
The Struggle for Small Businesses
Businesses have waited for months, some even years, for funds they desperately need to survive. Delays have resulted in layoffs, increased debt, and in some cases, total business closures. Frustration is mounting, especially after the recent failed vote on a federal tax bill designed to distinguish between valid claims and fraudulent activities.
Turning the Tide
The IRS has an opportunity to ease the burden by expediting claims from professional employer organizations which have undergone additional verification. As concerns rise about the slower processing rates — 1,000-2,000 claims per week versus 17,000 incoming — the urgent need for swift action becomes clear.
- The continuation of processing moratorium has made conditions critical for small businesses.
- Legitimate claims remain unprocessed, causing irreparable damage to local economies.
- Public pressure mounts for the agency to fulfill its responsibilities efficiently.
In conclusion, to restore trust, the IRS must promptly act on the backlog of legitimate claims and uphold its promise to small businesses struggling in the aftermath of the pandemic.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.