Tuberville Asks IRS for Answers Regarding Backlog of ERC Claims

June 13, 2024

The Honorable Daniel Werfel
Commissioner
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224

Commissioner Werfel,

I write concerning the over one million small businesses waiting for their Employee Retention Credit (ERC) claims to be reviewed or paid. As you are aware, the CARES Act reestablished the ERC, a refundable tax credit that afforded economic support to small businesses and job creators who weathered the pandemic and kept American workers on payroll as they faced financial challenges stemming from the COVID-19 pandemic. The moratorium on processing ERC claims the IRS implemented in September 2023 placed a severe strain on many small businesses across my state and the nation.

At a March 2024 House Ways and Means Committee hearing, you testified that the IRS is currently processing between 1,000-2,000 ERC claims per week. At that rate, it would take more than 10 years for outstanding ERC claims to be processed. It is unacceptable to continue punishing American employers who fought through an unprecedented disruption to their businesses while keeping employees on payroll. I continually hear from small- and medium-sized business owners in my state that circumstances have become dire. This important tax refund could mean the difference between laying off hard-working employees or closing their doors entirely. These outcomes were specifically what the ERC was intended to prevent.

Late last year, the IRS asserted that the moratorium on ERC claims processing would end at the beginning of this year. To date, we have seen no action taken, and the IRS appears to still be refusing to perform its most basic function of processing taxpayer refund claims in a timely manner. Additionally, in your April 2024 Senate Finance testimony, you said the IRS was developing a process to improve efficiency by digitizing pending ERC claims to expedite the processing by this spring. Since then, you have provided no update on the progress of implementation, and the moratorium remains in place.

Given the unnecessary hardships faced by businesses across the country due to the Service's inaction, it is imperative you provide clarity regarding the status of the ERC backlog. Please provide a response to the following questions by July 12, 2024:

Each day that passes with outstanding ERC claims unprocessed is a disservice to taxpayers and a threat to small- and medium-sized businesses. I look forward to your timely reply.

Tommy Tuberville
United States Senator