IRS Sees Fraud Risk for ‘Vast Majority’ of Covid Credit Claims

The IRS will deny tens of thousands more pandemic-era employee credit claims it deems potentially fraudulent in the coming weeks, as it remains in a holding pattern for processing new claims, the agency said Thursday.

The update follows months of fraud surveillance at the agency on the employee retention tax credit, created to help struggling businesses keep their doors open and employees on the payroll during the Covid-19 pandemic. The credit became enmeshed in fraud, with third-party companies encouraging taxpayers to claim it when they didn’t qualify.

“We’re seeing clear indicators that the vast majority, at least ...