The problem of fraudulent Employee Retention Tax Credit (ERTC) claims has been well documented. Indeed, the IRS issued a moratorium (currently through year end) on the processing of ERTC claims, due to a high volume of fraud. In a recent memo (AM 2023-007), the IRS is tamping down on a tactic used by claimants to argue for ERTC eligibility: relying on Occupational Safety and Health Administration (OSHA) guidance issued in 2020 and 2021. That guidance provided recommendations for wearing masks, providing sanitization supplies and encouraging social distancing, the IRS explained, which isn’t enough for employers to point to as government orders to suspend operations.
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