The IRS reports that it's making progress with efforts to recover money that was wrongly given out through the Employee Retention Credit.
The ERC was created to assist businesses in keeping employees during pandemic-related shutdowns, but it quickly became a target for fraud. Its complicated eligibility criteria allowed scammers to focus on small businesses, offering assistance with ERC applications for a fee, even if they weren't eligible.
The IRS stated that it collected $225 million from a voluntary disclosure program, which concluded on March 22. This program allowed small businesses that mistakenly received the credit to return the money and keep 20%. Over 500 taxpayers participated in this program.
“We are still very concerned about widespread abuse related to these claims that have negatively affected small businesses,” said IRS Commissioner Danny Werfel. “We are pleased with the early results of our efforts to aid businesses that were misled.”
Powell still sees rate cuts this year
Chair Jerome Powell mentioned on Wednesday that Federal Reserve officials are likely to decrease their benchmark interest rate later this year, despite recent reports indicating the continued strength of the U.S. economy and the increase in U.S. inflation in January and February.
“The recent data do not … materially change the overall picture,” Powell said at Stanford University, “which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2% on a sometimes bumpy path.”
Most Fed officials “see it as likely to be appropriate” to start cutting their key rate “at some point this year,” he added.
Rate cuts would begin to reverse the 11 increases the Fed carried out beginning in March 2022 to fight the worst inflation bout in four decades.
