As a Result of Tax-help Delays, Restaurant Associations Have Asked the IRS for Grace Time

The National Restaurant Association and its 52 affiliates have said that more time is required for ERTC requests to be completed.

A request has been made to the Internal Revenue Service (IRS) by the National Restaurant Association and all 52 of its state-level affiliates to modify its tax collection process for restaurants that have not yet received the advance refunds promised to employers as a form of pandemic-related financial assistance.

During 2020, enterprises whose activities were affected by the COVID issue will be eligible for a tax credit of up to 50 percent of each full-time employee’s remuneration, up to a maximum credit of $5,000 per employee who is retained on the payroll. As part of the CARES Act, a comprehensive COVID relief law that was approved in March 2020, the IRS was required to issue the credit in the form of a cash advance to those who qualified. Employers’ tax bills for the year 2021 would be modified in accordance with this.

Essentially, the legislation intended for the money to be extended up front in order to aid companies’ financial flow. In order to avoid having to wait until their tax payments were lowered by $5,000 for each employee, firms were given cash in advance of the reduction.
However, the Internal Revenue Service has fallen behind in processing the requests to get the credit in advance. According to the restaurant organisation, 83 percent of eateries who sought for the tax cut at least six months ago have not yet received the funds. Many people hoped to utilise the monies to finish paying their remaining taxes.

According to a letter sent to IRS Commissioner Charles Rettig and his boss, Secretary of the Treasury Janet Yellen, the group and its affiliates point to the case of a Texas operator who has yet to receive the money. According to the email, if those funds are not available, the anonymous restaurateur would be required to raise $1.1 million in order to pay their tax obligation by April 18, the deadline for all federal tax filers.

This is why the organisation has requested that automated tax collections be delayed until the backlog of ERTC requests has been cleared up. It also asks for a delay in the April 18 deadline for eateries that have not yet received their credits, as well as a period of grace for filers without needing extra documentation. Its last request is that the IRS inform it when an application for an ERTC may be handled in order to comply with the law.


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Sean Kennedy, executive vice president of public relations for the National Restaurant Association, said in a statement that “the ERTC has been a key recovery tool for hundreds of thousands of businesses, but far too many are still waiting for their return from the federal government.” In the run-up to Tax Day, many eateries are likely to be informed that they must overpay their taxes, with the promise of a later return. When it comes to a struggling sector, the system can be improved, and we are pressuring the IRS and the Treasury Department to implement our logical proposals.”

According to the restaurant organisation, the ERTC has proved to be extensively employed across the food business. Businesses whose activities were interrupted from March 2020 to January 2021 as a result of the pandemic are eligible for an early refund under the tax break.

In addition to members from restaurant groups in all 50 states, the letter’s signatories included leaders from the restaurant business in Puerto Rico and the District of Columbia.

Restaurant Business is owned by the National Restaurant Association, which has a controlling stake.