NW Valley Times

Congressman David Schweikert, along with Congressmen Jared Golden (D-ME), Mike Kelly (R-PA), and Glenn Grothman (R-WI), has introduced the Employee Retention Tax Credit Repeal Act. This bipartisan legislation aims to disallow the processing of Employee Retention Tax Credit (ERTC) claims filed after January 31, 2024. The bill also seeks to increase penalties for those defrauding the government and assist the Internal Revenue Service (IRS) in processing legitimate returns from small businesses.

The ERTC was initially designed to help Main Street retain employees during the pandemic. However, it has been exploited by promoters seeking to take advantage of the program, leading to its inclusion on the IRS’s “Dirty Dozen” list in 2023.

Earlier this year, IRS Commissioner Danny Werfel requested Congress's assistance in addressing fraud and error within the ERTC program. The proposed legislation is expected to save taxpayers an estimated $79 billion over ten years by eliminating a program that could cost up to $550 billion if allowed to continue.

“We’ve all heard from the number of small businesses in our district waiting for their claims to be processed,” said Rep. David Schweikert (AZ-01). “A 1.4 million return backlog still exists, and moving the deadline up, rather than waiting until April 2025, will enable the IRS to go after bad actors while approving legitimate claims faster and delivering long-overdue refunds to small businesses.”

“This tax credit was an emergency response to protect workers and small businesses during the pandemic. Today, bad actors are abusing the program,” Congressman Jared Golden (ME-02) said. “It’s past time we end this program — the conditions that made it necessary are over.”

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, commented on the necessity of repealing the ERTC: “Although the COVID public health and economic emergency has ended, our national debt and fiscal challenges continue to mount... Given that the economy has recovered from the pandemic, it’s clear that this tax credit has outlived its purpose.”

The ERTC Repeal Act would advance several measures:

- Increase penalties for promoters from $1,000 to $10,000 for individuals and $200,000 for business promoters.

- Impose a $1,000 penalty for failure to comply with due diligence requirements.

- Extend the statute of limitations period on assessments to six years.

Full bill text can be found here.

Congressman David Schweikert serves on various committees including Ways and Means Committee and is involved in multiple caucuses such as Blockchain Caucus and Telehealth Caucus.