IRS Halts New ERC Claims: What the September 2023 Moratorium Means for Businesses Still Waiting

What happened

On September 14, 2023, the IRS paused the processing of new ERC claims because of a surge in questionable filings and aggressive promotion activity.

The agency made clear that it believes a meaningful share of recent claims do not meet the legal standard.

What this means in practice

The moratorium does not mean every ERC claim is invalid. It does mean:

• new claims will face heavier scrutiny
• weakly documented claims are much riskier
• businesses should reassess any claim built around broad marketing language rather than statute-driven analysis

Businesses that should review their position immediately

• companies that filed recently through a promoter
• businesses that have not yet filed but were planning to
• businesses that signed contingent-fee ERC agreements
• companies that do not have contemporaneous documentation supporting eligibility

The key issue

Many ERC claims were marketed as easy money. They are not.

Eligibility remains grounded in:

• a qualifying decline in gross receipts
• a legally supportable partial or full suspension of operations
• proper wage calculations
• coordination with PPP and other relief programs

What businesses should do now

1. Preserve documentation

Save the legal memo, payroll calculations, gross receipts analysis, and any promoter materials.

2. Reevaluate the basis for the claim

If the claim was prepared from generalized eligibility language, it should be reexamined.

3. Avoid filing a weak claim into a hostile environment

The moratorium is a signal that the IRS intends to separate legitimate claims from unsupported ones.

Bottom line

Businesses with legitimate ERC claims should prepare for more scrutiny. Businesses with thin support should treat this as a warning, not an inconvenience.