The IRS says it’s making progress with initiatives to claw back money improperly distributed under the Employee Retention Credit.

The ERC was designed to help businesses retain employees during pandemic-era shutdowns, but it quickly became a magnet for fraud. Its complex eligibility rules allowed scammers to target small businesses, offering help applying for the ERC for a fee � even if they didn’t qualify.

The IRS said it received $225 million from a voluntary disclosure program, which ended on March 22, that let small businesses that thought they received the credit in error give back the money and keep 20%. That money came from over 500 taxpayers with another 800 submissions still being processed.

An ongoing program that lets small businesses withdraw unprocessed claims has led to 1,800 businesses withdrawing $251 million worth of claims. And finally, the IRS has assessed $572 million in audits of more than 12,000 businesses that filed over 22,000 improper claims.

�We remain deeply concerned about widespread abuse involving these claims that have harmed small businesses,� said IRS Commissioner Danny Werfel. �We are encouraged by the results so far of our initiatives designed to help misled businesses.�

The IRS stopped processing new claims in September, but said it will likely resume processing sometime this spring. An additional $3 billion in claims is being reviewed by IRS Criminal Investigation.

(AP)