Employee Retention Tax Credit Delays and IRS Challenges: Why You Need a Qualified Tax Professional

In her 2024 Annual Report to Congress, National Taxpayer Advocate Erin M. Collins highlighted improvements in IRS taxpayer services but also pointed out persistent challenges. Notably, these include extensive delays in processing Employee Retention Credit (ERC) claims and resolving identity theft cases. At TaxRepNow, we understand how these challenges can affect individuals and businesses. These points were highlighted in the Annual Report to Congress from National Taxpayer Advocate Erin Collins. Here’s a closer look at these issues and why working with a qualified tax professional is critical to navigating them successfully.

Delays in Processing Employee Retention Credit Claims

The Employee Retention Credit (ERC) was designed to support businesses that retained employees during the COVID-19 pandemic. However, the IRS continues to grapple with a significant backlog. As of October 26, 2024, the agency faced 1.2 million pending ERC claims, with many unresolved for over a year.

Businesses relying on these funds to cover expenses face a lack of transparency in tracking their claims. Additionally, confusing disallowance letters and audit-like procedures—without standard taxpayer audit protections—add further complexity. For some businesses, refund checks have been stolen, resulting in prolonged delays in receiving replacements.

While the IRS Commissioner anticipates processing approximately 500,000 additional claims in 2025, the timing and details remain uncertain. These delays emphasize the importance of working with experienced tax professionals, like those at TaxRepNow, to navigate the system effectively and minimize disruptions.

Broader IRS Challenges

Beyond ERC and identity theft cases, taxpayers face other systemic challenges, including:

• Return Processing Delays: Millions of paper-filed returns still require manual transcription, leading to significant processing delays.

• Service Accessibility: Despite improvements, the IRS only answered 31% of calls to assistors in 2024, leaving many taxpayers without timely support.

• Hiring and Retention Issues: Prolonged hiring processes and training bottlenecks hinder the IRS’s ability to deliver efficient service.

These challenges compound the difficulties taxpayers face, underscoring the need for expert assistance.

Why Choose a Qualified Tax Professional?

Navigating tax issues with the IRS requires expertise, patience, and persistence. Here’s why partnering with TaxRepNow can make a difference:

1. Expertise in Complex Cases: We specialize in resolving challenging tax issues, including ERC claims, identity theft cases, and refund delays.

2. Proactive Advocacy: Our team communicates directly with the IRS on your behalf, ensuring your case receives the attention it deserves.

3. Transparency and Support: We provide clear updates on your case status and guide you through each step of the process.

4. Time and Stress Savings: Letting professionals handle your tax issues allows you to focus on running your business or managing your personal finances.

Steps You Can Take Today

If you’re facing delays with your ERC claim or other tax issues, consider these steps:

1. Gather Documentation: Ensure you have all relevant records, including tax returns, correspondence from the IRS, and proof of ERC eligibility.

2. Monitor Your Case: Stay informed about your claim’s status, but be prepared for lengthy wait times.

3. Consult a Professional: Contact TaxRepNow to discuss your situation and develop a strategy for resolution.

Optimism for Future IRS Improvements

Despite current challenges, there is cause for optimism. The IRS has made strides in modernizing its systems and expanding taxpayer services, such as:

• Automating the processing of paper-filed returns.

• Enhancing online account capabilities for taxpayers.

• Expanding in-person services at Taxpayer Assistance Centers.

With continued funding and support, these improvements have the potential to transform the taxpayer experience.

The delays in ERC processing and identity theft case resolution highlight the importance of professional assistance in managing tax issues. At TaxRepNow, we are committed to helping taxpayers overcome these challenges with personalized, expert service. Don’t let IRS delays disrupt your finances or business operations. Contact us today to get the support you need.