BELLEVILLE, IL (June 27, 2024) — The economic aftermath of COVID-19 continues to unfold as U.S. businesses are now gripped by a new crisis: the indefinite postponement of the Employee Retention Credit (ERC) payments guaranteed by the federal government. Entrepreneurs, exemplified by Tami Lange, president of Save The Girls, utilized federal support designed to maintain jobs during unprecedented economic volatility, just to be met with governmental inertia stifling their revival.
The lingering impact of the pandemic necessitated this critical aid. Lange, whose enterprise shuttered amidst the global crisis, diligently applied on time and waited over a year for the pledged assistance, only to be mired in bureaucratic limbo.
Misplaced Trust and Broken Promises
Lange’s Save The Girls, a business offering innovative touchscreen purses across a network of more than 2,500 points of sale globally, persevered by retaining its workforce amid the closure of 95% of its retail partners, taking solace in promised ERC tax refunds. This lifeline remains unseen, more than a year later, leaving businesses like Lange’s without the funds to rebound and expand.
“The government’s abject failure to deliver ERC payments is suffocating my business’s ability to survive,” Lange contends. “Even as a supplier for over 2,000 locations nationwide and for additional retailers in Canada and Australia, I contend with counterproductive U.S. policies that hinder our growth and ability to contribute to the economy.”
The irony of protocols allegedly designed to uplift women in entrepreneurship exacerbates Lange’s frustration as she encounters firsthand the contradictory nature of government actions versus proclamations.
IRS Missteps Halting Economic Recovery
Complications from fraudulent claims and severe backlogs led to an IRS-enforced freeze on ERC disbursements, a procedural paralysis entangling legitimate businesses. Facing an indeterminate resolution timeline and extensions far exceeding the predicted 8-month waiting period, businesses left in this purgatory feel discarded, as pleas for urgent action go unresolved.
Unsustainable Burdens and the Struggle for Resolution Operating amidst soaring economic pressures, Lange’s business copes with burdensome freight costs, tariffs on imports, and disrupted logistics. This mirror’s nationwide systemic inefficiencies, casting doubt on the government’s pledge to uphold the economy.
In fall 2023, the IRS enacted an immediate moratorium on processing new ERC claims received on and after Sept. 14, 2023, which the IRS said was due to an increase in ERC scams and fraud. The moratorium was initially effective until at least Dec. 31, 2023; however, it has now been extended for the foreseeable future.
