Dear editor:
As someone who works in Washington, D.C., I see a lot of government dysfunction firsthand. But there are few things I find more frustrating than when bureaucrats get in the way of job creators and their livelihoods.
Case in point: we're seeing a regulatory red tape rodeo with the Internal Revenue Service (IRS) right now, screwing up the Employee Retention Credit (ERC) and leaving many Wyoming small businesses in the lurch.
Congress set up the ERC benefit in March 2020 as part of the bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act, to help businesses retain workers during the pandemic. The federal government has been using the ERC program since Hurricane Katrina in 2005 as a practical way to help employers keep their employees on the payroll during crisis and natural disasters.
In Wyoming and throughout America, the ERC program has been a lifeline for millions of Americans and has kept restaurants, hardware stores, childcare centers, homebuilders, and other key businesses and industries open. Unfortunately, the IRS is mishandling ERC claims processing, and communities are paying the price. There are currently tens of billions in unclaimed funds and over 1.4 million claims pending, with some business owners waiting years for the support they were promised.
Instead of using its vast resources to deliver tax relief to American job creators, the IRS announced a moratorium on processing new ERC claims in September 2023. While the IRS is sitting on between 180,000-300,000 valid claims, they have decided to prioritize issuing denial letters for potentially fraudulent claims. The result is that small businesses who were promised the tax credit continue to languish.
Compounding the problem is the fact that 70 percent of small businesses nationwide have less than four months of operating cash on hand, according to a recent study conducted by OnDeck. This is important because of the trickle-down effect this has on the rest of the economy. Small businesses owners who are facing a cash crunch are less likely to consider expanding their business, buying new equipment, or hiring new staff.
I’ll be the first to say that instances of fraud and abuse should not be tolerated. Fraud should be rooted out and prosecuted wherever it exists in government programs. But the IRS cannot simply disregard legitimate, low-risk ERC claims and subvert the will of Congress by focusing exclusively on invalid claims. After all, the IRS’ workforce of 78,000 employees is more than capable of processing these low-risk claims in a timely manner.
I grew up in Wyoming and I know that small businesses are the engine of Wyoming’s economy, driving innovation, creating jobs, and serving as the backbone of the state’s communities. These job creators are our family, our friends, and our neighbors. Let’s stand together and demand that the IRS be held to account and made to do its job. If the IRS doesn't follow the law, it is breaking it.
Sincerely,
Ryan Taylor
Ryan Taylor is CEO of 440 Strategies and was raised in Rawlins, Wyoming. He serves as the spokesman for the Coalition to Preserve American Jobs (CPAJ), a national group comprised of associations representing small businesses and responsible tax professionals.
