If enacted, SB5079 would amend existing regulations concerning the COVID-related employee retention tax credits, which were originally established to support businesses during the pandemic. The legislation aims to enforce stricter compliance measures that would make it harder for businesses and promoters to claim these credits improperly. Additionally, the bill introduces a six-year statute of limitations for the assessment of credits claimed under this section, which significantly alters how retention credits have been treated under previous laws.
Summary
SB5079, known as the ERTC Repeal Act of 2024, aims to introduce special enforcement provisions concerning claims made for COVID-related employee retention credits. The bill focuses on increasing the penalties associated with improper promotion and claims for these credits, intending to curb fraudulent activities associated with COVID-ERTC documents. It proposes stricter penalties for those who aid in the submission of understatements related to tax liability and aims to ensure that promoters adhere to rigorous due diligence requirements when assisting clients in claiming these credits.
Contention
The proposal is likely to face contention as it touches upon the balance between ensuring compliance and supporting small businesses that benefited from the employee retention tax credits during the pandemic. Advocates for the bill argue that increased scrutiny is necessary to prevent fraud, while opponents may express concerns about overregulation that could hinder legitimate claims and affect businesses’ recovery post-COVID. Additionally, some stakeholders fear that the proposed penalties could dissuade valid applications for the tax credits, limiting financial relief for struggling businesses.
Related
To increase the penalties applicable to persons facilitate fraud with respect to any COVID-related employee retention credit, and for other purposes.
Department of Education Appropriations Act, 2025 Department of Health and Human Services Appropriations Act, 2025 Department of Labor Appropriations Act, 2025