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.
Executive Order Accelerates Federal Cannabis Rescheduling and Expands Medical Marijuana and Cannabinoid Research
On December 18, 2025, President Donald Trump signed an Executive Order titled Increasing Medical Marijuana and Cannabidiol Research, marking the most consequential federal cannabis policy action in decades. While the Order does not legalize marijuana or immediately alter its status under federal law, it directs the administration to complete the long-anticipated rescheduling of cannabis under […]
Strict Compliance Is Necessary: NJ Public Bidding Dispute Offers Lessons for Public Entities and Contractors
In ML, Inc. v. Edison Township Board of Education, the New Jersey Appellate Division reinforced the discretion of public entities to draft and enforce timing requirements as to the dates of key bid forms that are required to be submitted with public bids. The court upheld the Edison Township Board of Education’s decision to award a […]
NJDEP Reproposes All Appropriate Inquiry (AAI) Due Diligence Discharge Reporting Rule: Key Implications
On November 17, 2025, the New Jersey Department of Environmental Protection (NJDEP) changed its previously proposed rule which would have required persons conducting All Appropriate Inquiry (AAI)(due diligence) at real properties to report any discharge of contamination discovered during the due diligence to NJDEP and the record owner of the property. NJDEP has now changed […]
Federal Cannabis Rescheduling: Status, Impacts, and Strategies
Recent reports indicate that President Trump is preparing to issue an executive order as early as Monday, December 15 directing his administration to finalize the long-anticipated reclassification of cannabis under the federal Controlled Substances Act (CSA) from Schedule I to Schedule III. This development follows years of regulatory review and political debate spanning multiple administrations […]
EPA's Landmark WOTUS Proposal and the Mandate of Sackett v. EPA
EPA Proposes Historic WOTUS Rule—A Major Victory for Predictability, Cost Savings, and Development Efficiency, Driven by the Supreme Court’s Sackett Ruling On November 20, 2025, the U.S. Environmental Protection Agency (EPA) and the Army Corps of Engineers published a Proposed Rule (Document 90 FR 52498) to redefine the “Waters of the United States” (WOTUS) in […]
NJ Contractors and Developers Eligible for Sales Tax Exemption for Affordable Housing Projects
New Jersey developers and contractors may now benefit from the NJ sales tax exemption for contractors under a new law designed to support the construction and improvement of affordable housing projects. P.L. 2024, c.3 (effective May 1, 2024) expands an existing sales tax exemption to include contractors working for “housing sponsors engaged in affordable housing […]
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