The IRS recently issued a news release identifying seven signs that a business’s Employee Retention Tax Credit (the “ERC”) may be incorrect. The IRS Commissioner also testified before the House Ways and Means Committee that the IRS is still receiving thousands more ERC claims per week than it is processing. The IRS Office of Chief Counsel issued a memorandum addressing penalty liability within the context of third-party payors and returns they file that underreport and underpay employment taxes. And the IRS Criminal Investigations Division announced that as of January 31, 2024, it had initiated 374 investigations involving more than $2.95 billion of potentially fraudulent ERC credits in tax years 2020, 2021, 2022, and 2023; eighteen of the 374 investigations have resulted in federal charges and of these eighteen cases, eleven have resulted in convictions so far. More information is available here.