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ERTC Repeal Act of 2024
9/25/2024, 2:53 AM
Summary of Bill S 5079
The bill argues that the ERTC has served its purpose and is no longer necessary as the economy has recovered and businesses are no longer facing the same level of financial strain. Supporters of the bill believe that repealing the ERTC will help streamline the tax code and reduce government spending.
Opponents of the bill argue that repealing the ERTC could have negative consequences for businesses that are still struggling to recover from the economic impact of the pandemic. They believe that the ERTC provides crucial support for businesses to retain their employees and stay afloat during challenging times. Overall, the ERTC Repeal Act of 2024 is a contentious piece of legislation that has sparked debate among lawmakers and stakeholders. It remains to be seen how the bill will progress through Congress and what impact its passage could have on businesses and the economy.
Congressional Summary of S 5079
ERTC Repeal Act of 2024
This bill increases the penalty for aiding and abetting the understatement of tax liability with respect to the employee retention tax credit (ERTC) by a COVID-ERTC promoter, extends the time period for assessing and collecting tax attributable to the understatement, and disallows the ERTC after January 31, 2024.
Under the bill, a COVID-ERTC promotor may be liable for the greater of $200,000 ($10,000 for a natural person), or 75% of the amount derived from the aid, advice, or assistance related to a COVID-ERTC document that understates a taxpayer’s tax liability. Under current law, the penalty for knowingly aiding and abetting in the understatement of tax liability is $1,000 for an individual return or $10,000 for a corporate return.
The bill defines a COVID-ERTC promoter as any individual, trust, estate, partnership, association, company, or corporation that provides aid, assistance, or advice related to a COVID-ERTC document for a contingency fee and with gross receipts derived from providing aid, assistance, or advice related to a COVID-ERTC document exceeding a specified threshold.
A COVID-ERTC document is any return, affidavit, claim, or other document associated with a ERTC claim related to COVID.
The bill extends the time period for assessing and collecting any tax liability associated with an understatement of tax liability related to the ERTC from five to six years.
Finally, under this bill, claims for the ERTC related to COVID must be filed on or before January 31, 2024.
