Employee Retention Tax Credit (ERC) Updates

BBSI has submitted client ERC claims to the IRS through BBSI’s federal payroll tax filings. Unfortunately, most of those claims continue to await processing by the IRS, including all claims submitted to BBSI in 2023 or later, and the IRS will not pay any refunds until it processes the claims.

BBSI continues to communicate with the IRS regarding the backlog of outstanding claims and has emphasized the urgency of client claims being processed. While the IRS does not provide status or timing updates on individual claims, we are doing everything we reasonably can to support the processing of our clients’ claims. The measures we have taken include:

• Consistent communication with our IRS contacts, including letters, calls and other correspondence stressing the importance of processing the ERC claims made by our clients as timely as possible.
• Providing the IRS a detailed reconciliation of all of BBSI’s payroll tax filings for the applicable quarters.
• Working closely with the National Association of Professional Employer Organizations (NAPEO) and other industry partners who have sent multiple letters to Congress and the IRS expressing frustration with the IRS’ failure to process claims.
• Working with legal advisers and government relations specialists to see if solutions can be developed with the IRS for the processing delays that BBSI and other PEOs and our clients are facing.
• Formally requesting assistance from the IRS Taxpayer Advocate Service.

What can BBSI clients do to help?

NAPEO has launched a Grass Roots Action Center where clients of PEOs (including those of BBSI) can submit a letter to their Senators and Representatives to help Congress understand the urgency of the IRS processing backlogged ERC claims and the importance of those funds to small business.

Visit this site to submit your information: NAPEO Grass Roots Action Center – Client Letter

What should BBSI clients expect going forward?

The IRS has announced that each ERC return will be reviewed prior to processing. To facilitate this process as efficiently as possible, BBSI clients should be ready to furnish all necessary supporting documentation for their claims upon request (if not already provided).

As soon as we receive a client's refund from the IRS, BBSI will reach out to the respective client to confirm we have the necessary supporting documentation and will coordinate disbursing the funds.

Clients who have previously received ERC funds through BBSI should be prepared to provide all supporting documentation for their claims in the case of an IRS audit. As always, clients are fully responsible for determining their own eligibility for their ERC claims. BBSI continues to encourage clients to use trusted tax advisors such as CPAs and tax attorneys to determine eligibility and to calculate qualified wages and qualified health plan expenses.