Small business not too small for action from Congress

They say small business isn’t for the faint of heart — it’s for the brave, the patient and the persistent. And small businesses are continuing to be brave, patient and persistent as they attempt to recover from the financial strain and stress the COVID-19 pandemic had on their operations. During the pandemic, 45% of small businesses experienced a 50% reduction in revenue.

Despite these challenges, many were able to retain employees in large part thanks to the Employment Retention Tax Credit (ERC) enacted by Congress in 2020. In fact, 95% of the 500 small businesses surveyed this year said the ERC credit had a major or moderate impact on their businesses. And even more staggering, 95% of survey respondents credited receiving ERC funds as critical for keeping employees on their payroll and their businesses open.

Since the creation of the ERC program, the Internal Revenue Service has continued to put out confusing and contradictory guidance. In September 2023, the IRS issued a moratorium on processing ERC claims. The moratorium exasperates the financial uncertainty faced by employers who are doing their best to keep their workforce intact.

Earlier this year, the IRS announced it would start processing low-risk claims in the summer. In August, that goalpost moved to the end of September.

Now, broken promise after broken promise — and continued bravery, patience and persistence required for small businesses — there is a backlog of over 1.4 million claims waiting to be processed. The IRS is blaming delays on a new sorting system and the resource-intensive nature of processing these claims.

It is misguided in its prioritization of “low-hanging fruit” claims, denying most of them to the tune of 1,000-2,000 claims per week. However, if this rate were to continue, some legitimate filers would wait over eight years for this lifeline. The timely processing of these claims is essential to ensure that businesses can access the funds they are entitled to and continue to contribute to the economic recovery of our community.

We are frustrated with the delays and uncertainties. Immediate action is needed. That is why I am asking our congressional leaders to use their oversight authority with the IRS to expedite the processing of the backlogged claims. I hope Nevada’s senators stands with those of other states who are holding IRS Commissioner Danny Werfel accountable.

They say the best time to support small businesses is always today. Congress, please support small businesses — today — and exercise your oversight authority with the IRS to expedite the processing of the backlogged ERC claims Nevadans are counting on.

Ken Evans is a Las Vegas small business advocate and former president of the Urban Chamber of Commerce.