IRS Releases Regulations Allowing For Recapture Of Erroneous COVID-19 Tax Credits

IRS Releases Regulations Allowing For Recapture Of Erroneous COVID-19 Tax Credits

Early in 2020, the IRS created procedures to allow employers to quickly take advantage of the FFCRA and CARES Act tax credits.  Now, the IRS has released temporary regulations that allow the IRS to recapture any of the tax credits credited to an employer in excess of the amount that the employer was actually entitled to receive.  The regulations provide that any amount of the credits for qualified leave wages, credits for qualified health plan expenses under sections 3131(d) and 3132(d), and any amount of the employee retention credit that were erroneously paid or credited to the employer can be recaptured.  Those incorrect tax credits will be treated as underpayments of  taxes and may be administratively assessed and collected in the same manner as the taxes. The temporary regulations also provide that the calculation of any credits erroneously claimed must take into account any amounts that were advanced to the employer under the processes established in 2020.  For more information on the employee retention tax credit, visit Tax Facts Online. Read More

Have a comment? Written by William Byrnes.

William H. Byrnes has achieved authoritative prominence with more than 20 books, treatise chapters and book supplements, 1,000 media articles, and the monthly subscriber Tax Facts Intelligence. Titles include: Lexis® Guide to FATCA Compliance, Foreign Tax and Trade Briefs, Practical Guide to U.S. Transfer Pricing, and Money Laundering, Asset Forfeiture; Recovery, and Compliance (a Global Guide). He is a principal author of the Tax Facts series. He was a Senior Manager, then Associate Director of international tax for Coopers and Lybrand, and practiced in Southern Africa, Western Europe, South East Asia, the Indian sub-continent, and the Caribbean. He has been commissioned by a number of governments on tax policy. Obtained the title of tenured law professor in 2005 at St. Thomas in Miami, and in 2008 the level of Associate Dean at Thomas Jefferson. William Byrnes pioneered online legal education in 1995, thereafter creating the first online LL.M. offered by an ABA accredited law school (International Taxation and Financial Services graduate program).

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