This announcement announces a second Voluntary Disclosure Program for taxpayers to resolve refunds or credits for erroneous Employee Retention Credit claims. The announcement explains taxpayer eligibility criteria, terms, and procedures for taxpayers electing to participate in the second Voluntary Disclosure Program. The announcement is intended to provide taxpayers an opportunity to efficiently resolve their civil tax liabilities under this second Voluntary Disclosure Program and avoid potential litigation.

This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for July 2024 used under § 417(e)(3)(D), the 24-month average segment rates applicable for August 2024, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv).

This notice provides guidance in the form of questions and answers on section 110 of the SECURE 2.0 Act of 2022. Section 110 allows employers to make matching contributions on account of employees’ qualified student loan payments (QSLPs) under certain defined contribution retirement plans. The notice also states that the Treasury Department and the IRS anticipate issuing proposed regulations with respect to section 110 and requests comments.

Federal rates; adjusted federal rates; adjusted federal long-term rate, and the long-term tax exempt rate. For purposes of sections 382, 1274, 1288, 7872 and other sections of the Code, tables set forth the rates for September 2024..

(Also Sections 42, 280G, 382, 467, 468, 482, 483, 1288, 7520, 7872.)

This revenue ruling provides various prescribed rates for federal income tax purposes for September 2024 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short-term, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the long-term tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low-income housing credit described in section 42(b)(1) for buildings placed in service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, shall not be less than 9%. Finally, Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of September 2024. See Rev. Rul. 2024-17, page 568.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of September 2024. See Rev. Rul. 2024-17, page 568.

The adjusted applicable federal long-term rate is set forth for the month of September 2024. See Rev. Rul. 2024-17, page 568.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of September 2024. See Rev. Rul. 2024-17, page 568.

The applicable federal short-term rates are set forth for the month of September 2024. See Rev. Rul. 2024-17, page 568.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of September 2024. See Rev. Rul. 2024-17, page 568.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of September 2024. See Rev. Rul. 2024-17, page 568.

The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of September 2024. See Rev. Rul. 2024-17, page 568.

The applicable federal mid-term rates are set forth for the month of September 2024. See Rev. Rul. 2024-17, page 568.

The applicable federal short-term, mid-term, and long-term rates are set forth for the month of September 2024. See Rev. Rul. 2024-17, page 568.

This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I).

This notice provides guidance in the form of questions and answers with respect to section 110 of Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act). Section 110 of the SECURE 2.0 Act allows employers to make matching contributions on account of employees’ qualified student loan payments (QSLPs) under section 401(k) plans, section 403(b) plans, SIMPLE IRA plans, and governmental section 457(b) plans (QSLP matches). Section 110 of the SECURE 2.0 Act applies to contributions made for plan years beginning after December 31, 2023.

This notice provides guidance on discrete issues under section 110 of the SECURE 2.0 Act to assist plan sponsors in implementing QSLP match programs. The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) anticipate issuing proposed regulations with respect to section 110 of the SECURE 2.0 Act, and, accordingly, invite comments on this notice and any other aspect of section 110.

Section 221(d)(1) of the Internal Revenue Code (the Code) defines a qualified education loan as any indebtedness incurred by a taxpayer solely to pay qualified higher education expenses, subject to the conditions of section 221(d)(1)(A)-(C), which provide that the qualified higher education expenses must be (i) incurred on behalf of the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer as of the time the indebtedness was incurred, (ii) paid or incurred within a reasonable period of time before or after the indebtedness is incurred, and (iii) attributable to education furnished during a period during which the recipient was an eligible student.

Section 401(a) sets forth requirements for a trust that forms part of a qualified retirement plan to constitute a qualified trust.

Section 401(k)(3) sets forth participation and nondiscrimination standards for qualified cash or deferred arrangements (CODAs). Section 401(k)(3)(A)(ii) provides that in order to be a qualified CODA for a plan year, the actual deferral percentage (ADP) of eligible highly compensated employees (HCEs) under the CODA may not exceed by more than specified margins the ADP of eligible nonhighly compensated employees (NHCEs) under the CODA for the plan year.

Section 401(m) sets forth nondiscrimination requirements with respect to matching contributions to a defined contribution plan. Section 401(m)(1) provides that a defined contribution plan is treated as meeting the requirements of section 401(a)(4) with respect to the amount of any matching contribution or employee contribution for a plan year only if the plan passes the actual contribution percentage requirement of section 401(m)(2) (the ACP test).

Section 403(b) sets forth requirements applicable to contributions to a section 403(b) plan made for employees who are performing services for a public school of a State or a local government or for employees of employers that are tax-exempt organizations under section 501(c)(3). Section 403(b)(12)(A)(i) provides that the requirements of section 401(m) apply to matching contributions made to a section 403(b) plan in the same manner as if the plan were a qualified retirement plan.

Section 408(p) sets forth requirements for making employee salary reduction contributions and nonelective employer and matching contributions to an employee’s SIMPLE IRA pursuant to a SIMPLE IRA plan.

Section 410(b) sets forth minimum coverage requirements for a plan to constitute a qualified trust under section 401(a).

Section 457(b) sets forth requirements for a plan to constitute an eligible deferred compensation plan. Section 457(b) provides that an eligible deferred compensation plan is a plan established and maintained by an eligible employer that covers only individuals who perform service for the employer, and that meets the deferral limitations described in section 457(b)(2). Section 457(e)(1)(A) provides that an eligible employer is a State, a political subdivision of a State, and any agency or instrumentality of a State or political subdivision of a State.

Section 4979 provides for an excise tax on excess contributions and excess aggregate contributions (excess contributions result from a plan failing the ADP test, and excess aggregate contributions result from a plan failing the ACP test). Section 4979(f)(1) provides for an exception to the tax to the extent excess contributions or excess aggregate contributions are corrected before the close of the first 2½ months of the following plan year. This correction period is extended to the close of the first six months of the following plan year in the case of an eligible automatic contribution arrangement, as defined in section 414(w)(3) (EACA).

Section 1.401(m)-1(b)(4) sets forth the exclusive rules for aggregating and disaggregating defined contribution plans that provide for employee contributions and matching contributions. Under § 1.401(m)-1(b)(4)(iii), a plan is defined as a plan within the meaning of § 1.410(b)-7(a) and (b), after application of the mandatory disaggregation rules of § 1.410(b)-7(c) (including disaggregation rules for plans that cover both collectively bargained and non-collectively bargained employees) and the permissive aggregation rules of § 1.410(b)-7(d), as modified by § 1.401(m)-1(b)(4)(v). Section 1.410(b)-7(c)(4)(i)(A) requires that if a plan has multiple disaggregation populations, the disaggregation populations must be disaggregated and treated as separate plans.

Section 1.401(m)-2(a)(4) sets forth timing rules for taking into account employee contributions and matching contributions under the ACP test. Under § 1.401(m)-2(a)(4)(iii), a matching contribution is taken into account in determining the actual contribution ratio (as defined in § 1.401(m)-5) for an eligible employee for a plan year or applicable year only if (a) the matching contribution is allocated to the employee’s account under the terms of the plan as of a date within that year, (b) the matching contribution is made on account of (or the matching contribution is allocated on the basis of) the employee’s elective deferrals or employee contributions for that year, and (c) the matching contribution is actually paid to the trust no later than the end of the 12-month period immediately following the year that contains that date.

Section 110(a) of the SECURE 2.0 Act added section 401(m)(4)(A)(iii) of the Code, which amends the definition of matching contributions to include employer contributions made to a defined contribution plan on account of an employee’s QSLP.

Section 110(b) of the SECURE 2.0 Act added section 401(m)(4)(D) of the Code, which defines a QSLP as a payment that was made by an employee in repayment of a qualified education loan (as defined in section 221(d)(1)) incurred by the employee to pay qualified higher education expenses, subject to the section 401(m)(4)(D)(i) amount limitation and the section 401(m)(4)(D)(ii) certification requirement.

Pursuant to section 401(m)(4)(D)(i), the amount of an employee’s aggregate qualified education loan payments for a year that can be QSLPs cannot exceed an amount equal to the limitation applicable under section 402(g) for the year (or, if an employee’s compensation under section 415(c)(3) for the year is less than the limitation applicable under section 402(g) for the year, the employee’s compensation), reduced by the employee’s elective deferrals for the year.

Pursuant to section 401(m)(4)(D)(ii), for a qualified education loan payment to be a QSLP, the employee making the qualified education loan payment must certify annually to the employer making the matching contribution that payment has been made on the loan.

For purposes of a QSLP, the term qualified higher education expenses means the cost of attendance (as defined in section 472 of the Higher Education Act of 1965, as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997) at an eligible educational institution (as defined in section 221(d)(2) of the Code).

Section 110(c) of the SECURE 2.0 Act added section 401(m)(13) of the Code, which provides, in part, that QSLP matches shall be treated as matching contributions if the following requirements of section 401(m)(13)(A)(i)-(iv) are satisfied: (i) a plan provides matching contributions on account of elective deferrals (elective deferral matches) at the same rate it provides QSLP matches; (ii) the plan provides QSLP matches only on behalf of employees otherwise eligible to receive elective deferral matches; (iii) under the plan, all employees who are eligible to receive elective deferral matches are eligible to receive QSLP matches; and (iv) the plan provides that QSLP matches vest in the same manner as elective deferral matches. Section 401(m)(13)(B)(i) provides that, for purposes of section 401(m)(13)(A)(iii), section 401(a)(4), and section 410(b), QSLP matches shall not fail to be treated as available to an employee solely because the employee does not have debt incurred under a qualified education loan. In addition, section 401(m)(13)(B)(iv) provides that the elective deferrals of employees who receive QSLP matches may be tested separately from the elective deferrals of other employees for purposes of the ADP test of section 401(k)(3)(A)(ii). Section 401(m)(13)(C) states that an employer may rely on an employee certification of payment under section 401(m)(4)(D)(ii).

Section 110(d) of the SECURE 2.0 Act added section 408(p)(2)(F) of the Code, which provides that an arrangement under a SIMPLE IRA plan shall not fail to be a qualified salary reduction agreement solely because QSLPs are treated as elective employer contributions (pursuant to section 408(p)(2)(A)(i)(I)) under the plan. Section 408(p)(2)(F) includes rules for SIMPLE IRAs that include a QSLP match feature that are generally analogous to the QSLP match rules in section 401(m)(4)(D) and 401(m)(13).

Section 110(e) of the SECURE 2.0 Act amended section 403(b)(12)(A) of the Code to provide that whether a section 403(b) plan offers a QSLP match shall not be taken into account for purposes of determining whether the plan satisfies the universal availability requirement of section 403(b)(12)(A)(ii).

Section 110(f) of the SECURE 2.0 Act amended section 457(b) of the Code to state, in part, that a section 457(b) plan maintained by an employer described in section 457(e)(1)(A) (governmental section 457(b) plan) shall not fail to be an eligible deferred compensation plan merely because that plan, or a section 401(a) or 403(b) plan maintained by the same employer, adopts a QSLP match feature as described in section 401(m)(13).

Section 110(g) of the SECURE 2.0 Act provides for the Secretary of the Treasury (or the Secretary’s delegate) to prescribe regulations for purposes of implementing section 110, including regulations:

(1) permitting a plan to make QSLP matches at a different frequency than matching contributions are otherwise made under the plan, provided that the frequency is not less than annually;

(2) permitting employers to establish reasonable procedures to claim QSLP matches under the plan, including an annual deadline (not earlier than three months after the close of each plan year) by which a claim must be made; and

(3) promulgating model amendments which plans may adopt to implement QSLP matches for purposes of sections 401(m), 408(p), 403(b), and 457(b) of the Code.

This notice applies for plan years beginning after December 31, 2024. For plan years beginning before January 1, 2025, a plan sponsor may rely on a good faith, reasonable interpretation of section 110 of the SECURE 2.0 Act. The guidance in this notice is an example of a good faith, reasonable interpretation of section 110 of the SECURE 2.0 Act.

The Treasury Department and the IRS anticipate issuing proposed regulations with respect to section 110 of the SECURE 2.0 Act and, accordingly, invite comments and suggestions regarding the matters discussed in this notice and, generally, on section 110 of the SECURE 2.0 Act. In particular, the Treasury Department and the IRS request comments on:

(1) Whether additional guidance would be helpful relating to passive certification or independent verification;

(2) Whether, for a plan that provides for QSLP matches to be made more frequently than annually, guidance would be helpful in the case of an employee who receives a QSLP match early in a year before it is known whether subsequent elective deferrals will reduce the employee’s maximum QSLP for the year;

(3) Whether additional examples of reasonable procedures would be helpful with respect to QSLP matches;

(4) Whether additional guidance would be helpful concerning the application of the QSLP rules to SIMPLE IRA plans; and

(5) Whether additional guidance would be helpful concerning the application of the QSLP rules to SIMPLE 401(k) plans.

Comments should be submitted in writing on or before October 18, 2024, and should include a reference to Notice 2024-63. Comments submitted after October 18, 2024, will be considered if doing so will not delay the issuance of proposed regulations with respect to section 110 of the SECURE 2.0 Act. Comments may be submitted electronically via the Federal eRulemaking Portal at www.regulations.gov (type “IRS Notice 2024-63” in the search field on the Regulations.gov home page to find this notice and submit comments). Alternatively, comments may be submitted by mail to: Internal Revenue Service, Attn: CC:PA:LPD:PR (Notice 2024-63), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044.

The Treasury Department and the IRS will publish for public availability any comment submitted electronically or on paper to its public docket.

The collection of information contained in this notice will be submitted to the Office of Management and Budget in accordance with the Paperwork Reduction Act (PRA) (44 U.S.C. 3507) under OMB control number 1545-1669. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

The collections of information in this notice are contained in Q&A B-1, Q&A B-2, Q&A B-3, Q&A C-3, and Q&A E-1 of this notice. This information will be used by plan administrators to administer QSLP match programs. The third-party disclosures and recordkeeping requirements will be submitted to OMB for review and approval in accordance with 5 CFR 1320.10.

The likely respondents are employees who are participants in plans that adopt a QSLP match feature and administrators of plans that adopt a QSLP match feature.

Estimated number of respondents: 158,000 to 617,000.

Estimated frequency of responses: Annually.

Estimated average time per response: .25 hours.

Estimated total annual burden: 39,500 to 154,250 hours.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by section 6103 of the Code.

The principal author of this notice is Isaac Stein of the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). For further information regarding this notice, contact Isaac Stein at (202) 317-6320 (not a toll-free number).

¹ Section 401(m)(13), through its reference to QSLP matches, incorporates for governmental section 457(b) plans the provisions of section 401(m)(4)(D).

² Section 401(m)(13)(B)(i) provides, in part, that for purposes of section 401(m)(13)(A)(iii), QSLP matches “shall not fail to be treated as available to an employee solely because the employee does not have debt incurred under a qualified education loan.” However, section 401(m)(13)(B)(i) does not provide similar “shall not fail to be treated as available” language for an employee who has debt incurred under a qualified education loan but is excluded from eligibility for a QSLP match under plan terms. Accordingly, if all employees with qualified education loans are not eligible for a QSLP match under plan terms, the plan’s QSLP match will not be treated as being available to all employees under section 401(m)(13)(A)(iii).

³ Section 110(h) of the SECURE 2.0 Act indicates that the amendments made by section 110 shall apply to contributions made for plan years beginning after December 31, 2023. As a result, a QSLP match cannot be made on account of qualified education loan payments paid on or before December 31, 2023 (or, for non-calendar year plans that have adopted a QSLP match feature, before the first day of the plan year that includes the QSLP match if that date is later).

⁴ The Treasury Department and the IRS received comments expressing concern about the potential for the imposition of section 4979 excise taxes on excess contributions and excess aggregate contributions as a result of QSLP matches claimed after the 2½-month correction deadline under section 4979. Plans that adopt a QSLP match feature may avoid this excise tax concern by either adopting EACA provisions or adopting reasonable QSLP match claim deadlines that are earlier than 2½ months after the end of a plan year.

The Internal Revenue Service (IRS) announces a second ERC Voluntary Disclosure Program for employers (participants) to resolve erroneous claims for credit or refund involving the Employee Retention Credit (ERC). The ERC is a refundable tax credit intended for businesses and tax-exempt organizations that continued paying employees during the COVID-19 pandemic if their operations were fully or partially suspended due to a government order, they experienced the required decline in gross receipts, or they were a recovery startup business during the relevant eligibility periods.

Since the enactment of legislation authorizing ERC claims, the IRS has had concerns about scams and potential fraud regarding such claims given false and misleading public advertisements and scams taking advantage of taxpayers. Those that filed for and erroneously received the ERC face enforcement action from the IRS and are subject to assessment and collection procedures. The IRS believes that it would prevail in litigation to recover credits or refunds of erroneous ERC claims and that the imposition of appropriate penalties and interest would be upheld by a court. The IRS is offering employers an opportunity to resolve their civil tax liabilities under this second ERC Voluntary Disclosure Program and avoid potential civil litigation, penalties, and interest.

In Announcement 2024-3, 2024-2 I.R.B. 364, the IRS announced the first ERC Voluntary Disclosure Program, which ended on March 22, 2024. More than 2,600 taxpayers applied to the first ERC Voluntary Disclosure Program to resolve their improper ERC claims and avoid civil penalties and unnecessary litigation. Participants included common law employers who used a third-party payer to claim the ERC on their behalf. The first ERC Voluntary Disclosure Program included settlement of the ERC for purposes of a participant’s employment tax obligations by eliminating their eligibility for the ERC while allowing a participant to retain 20% of the claimed ERC amount. Because the ERC reduces the income tax expense for qualified wages under rules similar to section 280C of the Internal Revenue Code (Code), the first ERC Voluntary Disclosure Program also resolved the issue of the corresponding adjustment to income tax expense for participants.

This second ERC Voluntary Disclosure Program also includes the settlement of the ERC for purposes of a participant’s employment tax obligations by eliminating their eligibility for the ERC. However, participants in this second ERC Voluntary Disclosure Program are allowed to retain 15% of the claimed ERC amount. Participation in the second ERC Voluntary Disclosure Program is limited to ERC claims filed for the 2021 Tax Period(s) and includes common law employers who used a third-party payer to claim the ERC on their behalf. This second ERC Voluntary Disclosure Program also resolves the issue of the corresponding adjustment to income tax expense for participants. The second ERC Voluntary Disclosure Program, like the first, is intended to settle erroneous, yet non-willful ERC claims. Taxpayers subject to potential criminal liability should utilize the IRS Criminal Investigation Voluntary Disclosure Practice.

Any participant that has claimed the ERC for tax periods in 2021 and has received a credit or refund prior to August 15, 2024, is eligible to participate in this second ERC Voluntary Disclosure Program, provided that:

(1) The participant is not under criminal investigation and they have not been notified that the IRS intends to commence a criminal investigation;

(2) The IRS has not received information from a third party alerting the IRS to the participant’s noncompliance, nor has the IRS acquired information directly related to the noncompliance from an enforcement action;

(3) The participant is not under an employment tax examination by the IRS for any tax period(s) for which the taxpayer is applying for this second ERC Voluntary Disclosure Program;

(4) The participant has not been notified by the IRS that the ERC they received is being recaptured for any tax period(s) for which the taxpayer is applying for this second ERC Voluntary Disclosure Program¹; and

(5) The participant has not previously received notice and demand for repayment of all or part of the claimed ERC.

A participant that claimed the ERC using a third-party payer (such as an agent under section 3504 of the Code, a professional employer organization, or a certified professional employer organization) that claimed the ERC for the participant on an employment tax return filed under the third-party payer’s own employer identification number (EIN) rather than the EIN of the participant, may participate in this second ERC Voluntary Disclosure Program, but the third-party payer must submit the application described in Section 4 of this announcement on the participant’s behalf.

The terms of this second ERC Voluntary Disclosure Program are as follows:

(1) Employment Tax Adjustments – The participant is not eligible for, or entitled to, any ERC, including both the refundable and non-refundable portions, for the tax period(s) at issue.

(2) The participant will remit back to the Department of the Treasury 85% of the claimed ERC, including both the refundable and non-refundable portions.

(3) The participant will not be required to repay any overpayment interest received. If the participant makes full payment of 85% of the claimed ERC prior to executing the closing agreement, no underpayment interest will apply. If the IRS approves a request for an alternative payment arrangement such as an installment agreement, interest may apply from the agreement date.

(4) Income Tax Effects – Because the settlement eliminates a participant’s eligibility for and/or entitlement to all of the claimed ERC, participants are not required to reduce wage expense with respect to any of the previously claimed ERC. Consequently, if they had not previously reduced wage expense by any of the claimed ERC, participants need not file amended returns or Administrative Adjustment Requests (AARs) to reduce wage expense. Correspondingly, if they had previously reduced wage expense by any of the claimed ERC, participants should not reduce wage expense by any of the claimed ERC if they file an amended return or AAR adjusting the previous reduction to wage expense. Pursuant to the settlement, a participant has no income with respect to the resolution of the employment tax obligation by remittance of payment of only 85% of the claimed ERC, including both the refundable and non-refundable portions.

(5) Preparer/Advisor Information – If a return preparer or advisor assisted or advised the participant with any portion of the claim for credit or refund, the participant will provide the name, address, and phone number of the preparer(s) or advisor(s) who assisted with the claim for credit or refund and a description of services provided by the preparer or advisor.

(6) Application of Penalties – The IRS will not assert civil penalties related to the underpayment of employment tax attributable to the claimed ERC against a participant of this ERC Voluntary Disclosure Program under Announcement 2024-30 that remits full payment of 85% of the claimed ERC prior to executing the closing agreement.

(7) The participant will execute a closing agreement, as more fully described in Section 4(3) of this announcement.

(1) Form 15434, Application for Employee Retention Credit Voluntary Disclosure Program

Participants in this second ERC Voluntary Disclosure Program must notify the IRS of their election by completing and submitting Form 15434, Application for Employee Retention Credit Voluntary Disclosure Program, on or before 11:59 pm local time on November 22, 2024. Participants must submit Form 15434 and any required attachments electronically via the Document Upload Tool at irs.gov/DUT.

Form 15434 must be prepared under penalties of perjury and:

(a) Include the taxpayer’s name, taxpayer identification number, current address, and daytime telephone number. If a practitioner will represent the taxpayer, the practitioner must provide a completed Form 2848, Power of Attorney and Declaration of Representative;

(b) Identify the tax period(s) for which the ERC was claimed, the form on which the ERC was claimed, and the full amount of the ERC claimed, including both the amounts that were refundable and non-refundable;

(c) If the ERC was claimed for the first or second quarters of tax year 2021, a completed, signed ERC Voluntary Disclosure Program Form SS-10, Consent to Extend the Time to Assess Employment Taxes, for the 2021 Tax Period(s), is required to be submitted with Form 15434;

(d) If the ERC was claimed by a third-party payer on behalf of the participant, as described in Section 2, the third-party payer must attach a copy of the relevant pages of the Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, that was attached to each Form 941, Employer’s Quarterly Federal Tax Return, on which the third-party payer claimed the ERC for the participant; and

(e) If a return preparer or advisor assisted with the claim for credit or refund, include the name, address, and phone number of the preparer(s) and advisor(s) who assisted with the claim for credit or refund and a description of services provided by the preparer or advisor.

(2) Payment

Form 15434 will help a participant calculate how much they will be required to pay to the Department of the Treasury under the terms of the second ERC Voluntary Disclosure Program.

A participant should use the Electronic Federal Tax Payment System (EFTPS) to submit an online payment(s). Payment should be made separately for each tax period upon submission of Form 15434. In EFTPS, participants should select the form they filed their employment tax return on, such as Form 941 (Form 15434 is not an option in EFTPS). Then, participants should select “Audit Adjustment” and “Advance Payment of Tax Deficiency” for “Tax Type.” Participants should not make a single, lump-sum payment for multiple tax periods to ensure such payments are accurately credited to the correct tax period. Full payment of the liabilities under this second ERC Voluntary Disclosure Program should be made by the date the closing agreement described in subsection (3) is executed by the participant. Participants who are unable to remit full payment of the 85% of claimed ERC may be considered for an alternative payment arrangement such as an installment agreement, pending approval.

(3) Closing Agreement

After receiving the requested information, the IRS will prepare a closing agreement under section 7121 of the Code in accordance with the terms of the settlement.

The IRS will mail the closing agreement to the participant who must sign and return it to the IRS within 10 days of the date of mailing by the IRS. The IRS may grant an extension for good cause to participants who request additional time within the 10-day period. Full payment of the liabilities under this second ERC Voluntary Disclosure Program should be made by the date the closing agreement is executed by the participant.

As discussed in Section 4(2), participants who are unable to remit full payment of the liabilities under this second ERC Voluntary Disclosure Program may be considered for an alternative payment arrangement such as an installment agreement, pending approval.

(4) Other Matters

(a) Denial of a participant’s request to participate in this second ERC Voluntary Disclosure Program is not subject to judicial review or administrative appeal.

(b) Execution of a closing agreement under this second ERC Voluntary Disclosure Program does not preclude the IRS from investigating any associated criminal conduct or recommending prosecution for violation of any criminal statute and does not provide any immunity from prosecution.

CONTACT INFORMATION

The principal author of this announcement is Michael Franklin of the Office of the Associate Chief Counsel (Procedure and Administration). If you need help completing Form 15434, have questions on the status of your ERC Voluntary Disclosure Program application, or have other ERC Voluntary Disclosure Program related questions, contact the ERC Voluntary Disclosure hotline at 414-231-2222 (not a toll-free number).

¹ The IRS notifies an employer of ERC recapture by issuing a Letter 6577-C, Employee Retention Credit (ERC) Recapture.