Billy Long Nominated as IRS Commissioner: What This Means for ERC and Tax Enforcement

Following President Donald Trump’s inauguration on January 20, 2025, IRS Commissioner Danny Werfel officially stepped down, leaving Doug O’Donnell as interim commissioner until the Senate confirms a permanent replacement.

Werfel’s tenure focused on modernizing the IRS and increasing enforcement using Inflation Reduction Act (IRA) funding, particularly targeting high-income taxpayers and businesses. With a Republican-led administration and Congress, many of these initiatives could be rolled back.

Trump has nominated Billy Long, a former Missouri congressman and auctioneer, as his pick to lead the IRS. Long, a longtime Trump ally, has been involved in marketing Employee Retention Credit (ERC) claims, making his nomination especially relevant for businesses that have claimed or are considering claiming the credit.

What Does This Mean for ERC Claimants?

Long’s past work with ERC claim firms could lead to a more lenient approach to ERC audits and enforcement, potentially reducing IRS scrutiny on legitimate claims. However, given the IRS’s aggressive stance on ERC fraud under Werfel, scrutiny of questionable claims will likely continue.

Since July 2024, the IRS has been issuing thousands of ERC disallowance notices to businesses that claimed the credit. These notices indicate that the IRS has determined certain claims to be ineligible, often citing insufficient documentation, failure to meet eligibility criteria, or claims involving aggressive ERC promoters.

Many businesses that filed ERC claims in good faith are now facing IRS pushback, making it critical to have strong documentation and legal support to dispute disallowances. Long’s nomination raises questions about whether IRS policies on ERC audits and disallowances will shift under new leadership.

Businesses that claimed ERC should ensure they have proper documentation in case of an audit. The IRS has already recovered over $1 billion in voluntary repayments and continues to investigate improper filings. While policy shifts could ease some enforcement pressure, compliance remains critical.

The National Taxpayer Advocate, Erin M. Collins, recently released her 2024 Annual Report to Congress, identifying delays in ERC processing as one of the most serious challenges facing taxpayers.

According to the report, while IRS taxpayer services have improved overall, businesses awaiting ERC refunds have faced significant delays, uncertainty, and inconsistent processing timelines. Collins also emphasized that IRS funding for taxpayer services and modernization remains a critical issue, urging Congress to ensure adequate resources are allocated to resolve backlogged claims.

With the IRS still processing ERC claims and sending out disallowance notices, businesses should be prepared for potential delays, audits, and appeals if their claims are challenged.

2021 ERC Claims Can Still Be Filed Until April 15, 2025

Eligible businesses can still file ERC claims for 2021 wages until April 15, 2025. Many businesses that haven’t yet claimed due to uncertainty still have time to determine eligibility and file before the deadline.

With IRS leadership changes underway, businesses should act now to secure their credits while ensuring compliance with IRS guidelines. If your business qualifies but hasn’t filed, working with a trusted tax professional is essential.

What Should Businesses Do Now?

• Review ERC claim documentation to ensure compliance.
• File 2021 ERC claims before the April 15, 2025, deadline if eligible.
• Stay updated on IRS policy changes that may impact ERC audits.
• Work with a trusted tax professional to navigate compliance challenges.

Billy Long’s nomination signals potential changes in ERC enforcement and IRS priorities, but businesses should remain cautious and ensure their claims are well-documented and compliant.

As always, Strategic Tax Planning is here to help. Whether you need assistance with ERC claims, IRS audits, or general tax compliance, our team is ready to provide expert guidance tailored to your business needs. Contact us at info@strategictaxplanning.net or call (202) 455-6010 to discuss how these potential changes could impact your financial goals.