IRS claws back money given to businesses under fraud-ridden COVID-era tax credit program

The IRS says it’s making progress with initiatives to claw back money improperly distributed under the Employee Retention Credit. The ERC was designed to help businesses retain employees during pandemic-era shutdowns, but it quickly became a magnet for fraud. Its complex eligibility rules allowed scammers to target small businesses, offering help applying for the ERC for a fee — even if the business didn’t qualify. The IRS said it received $225 million from a voluntary disclosure program that let small businesses that thought they received the credit in error give back the money and keep 20%. The program ended on March 22.