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Congresswoman Debbie Dingell (MI-06) today sent a letter to Internal Revenue Service (IRS) Acting Commissioner Douglas O’Donnell requesting answers regarding the slow pace of authorizing, processing, and disbursing the Employee Retention Tax Credit (ERC). The letter comes in response to concerns from local businesses who are depending on the program to retain employees.

“As a pandemic-era relief program, eligible businesses and tax-exempt organizations could claim ERCs to assist with retaining employees,” Dingell wrote. “It is the end of January of 2025, marking nearly 5 years after the declaration of the COVID-19 pandemic and the subsequent enactment of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which implemented this tax incentive program.”

“A moratorium for new ERC claims was announced in September 2023, and it has had a clear impact on eligible businesses and tax-exempt organizations. It is known that the ERC program was a target for significant widespread fraud, which also affected other pandemic-era programs and led to the enforcement of the moratorium,” Dingell continued. “However, the moratorium has had a punitive effect on entities that are lawfully qualified for this program. Though the moratorium was initially implemented to prevent the processing of new claims, it appears that since September 2023, very little progress has been made on the unresolved ERC claims that were filed before the moratorium was implemented.”

“Several of the businesses in my district have reported that without the refunds from their tax credit claims, they are in jeopardy of being able to retain their employees,” Dingell concluded. “I urge the Internal Revenue Service to conduct a comprehensive review of its current procedures and provide a detailed update on the steps being taken to ensure qualifying employers receive the credits guaranteed to them through the CARES Act. Thank you for your prompt attention to this matter.”

Specifically, Dingell requested answers to the following questions:

1. How many entities have claimed ERCs, especially in the past few tax years?
2. Of those who have claimed ERCs, how many entities have received refunds?
3. On August 8th, 2024, the IRS announced that it had identified 50,000 valid, low-risk ERC claims and would be moving them forward for payment processing in coming weeks. What is the status of this effort?
4. The IRS additionally announced that the moratorium’s coverage had shifted, and that the agency would begin judiciously processing claims filed between September 14th, 2023, and January 31st, 2024. When can businesses expect this work to be completed?

View the full text of the letter here.