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Restaurant Association Urges IRS to Release ERC Funds

Posted by Concannon Miller on Tue, Mar 8, 2022

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Restaurant Association Urges IRS to Release ERC FundsThe National Restaurant Association is urging the IRS to release crucial Employee Retention Credits to the pandemic-stricken industry.

Many restaurants that applied for ERC have not received the federal funds. A recent poll found 83 percent of operators who applied for the tax credit over six months ago still have not received any funds.

“The ERC has been a critical recovery tool for hundreds of thousands of restaurants, but far too many are still waiting for their refund from the federal government,” said Sean Kennedy, executive vice president for Public Affairs at the National Restaurant Association.

The issue is compounded by a loss of restaurants’ normal tax deduction for payroll in their 2021 tax filing. This creates a cash flow crisis as many restaurants will owe more in taxes due to refunds they have not received.

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“As Tax Day approaches, many restaurants are about to be told to overpay their taxes, with the promise of a refund later,” Kennedy said. “The system can work better for an industry on the ropes, and we are pressing the IRS and Treasury to act on our common sense solutions.”

The National Restaurant Association cited a case of a third-generation family-owned restaurant company in Texas already facing this scenario. Based on their eligibility, the business applied for ERC in the first and second calendar quarters of 2021. Because of the backlog processing Form 941, to date, the restaurant has not received their ERC refunds – but the loss of the payroll tax deductions threaten to trigger a $1.14 million tax liability due by April 18, 2022.

Concannon Miller has helped hundreds of clients apply for Employee Retention Credits, many of which are unfortunately still awaiting refunds from the IRS.

READ MORE: The Employee Retention Credit: The Improved Benefits for Businesses in 2021

In a letter last month to the IRS, the National Restaurant Association asked the organization to:

  • Halt automated collections, including the lien/levy issuance, until the IRS can certify the Form 941 backlog has been resolved.
  • Delay the collection process for filers until any mail that may include an abatement request is processed.
  • Streamline the reasonable cause penalty abatement process for taxpayers impacted by the COVID-19 pandemic without the need for written correspondence.
  • Communicate the status of amended returns and ERC refunds, including expected dates for when tax documents will be processed.

Has your business filed for Employee Retention Credits yet? You have three years from when your quarterly returns were originally filed to request the credits, so there's a lot of money out there with this program we suggest you take advantage of. Please contact us for personalized assistance to see if your business might qualify.

Topics: McDonald's management, Restaurants

Concannon Miller’s unique, holistic and intimate approach to financial health sets us apart from smaller CPA firms with more limited resources as well as mega firms where mid-sized clients struggle for attention. Contact us here to talk about improving your business.

This communication is designed to provide accurate and authoritative information in regard to the subject matter covered at the time it was published. However, the general information herein is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purposes of avoiding tax penalties.

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