Recently, the IRS released new guidance to rein in a pandemic-era tax break that has spiraled out of control. The IRS issued a General Legal Advice Memorandum (GLAM) on November 3, 2023, outlining the legal basis it’ll be using to restrict approvals for Employee Retention Credit (ERC) claims and to recover billions through audits of erroneously approved prior claims.

This guidance marks a dramatic shift in the IRS focus, away from processing approvals from the recent flood of highly suspect ERC claims, to increasing the time spent reviewing claims in process, and dramatically increasing audits of suspect refunds previously approved.