Bill > HR9738

This bill aims to increase the penalties applicable to persons who facilitate fraud with respect to any COVID-related employee retention credit (COVID-ERTC). The key provisions of the bill include: 1. Increasing the assessable penalty on COVID-ERTC promoters for aiding and abetting understatements of tax liability, with the penalty being the greater of $200,000 ($10,000 for individuals) or 75% of the promoter's gross income derived from the aid, assistance, or advice. 2. Treating the failure of a COVID-ERTC promoter to comply with due diligence requirements as satisfying the knowledge requirement for the assessable penalty for aiding and abetting understatement of tax liability. 3. Imposing a $1,000 penalty on COVID-ERTC promoters who fail to comply with due diligence requirements set by the Secretary of the Treasury. 4. Treating any COVID-related employee retention tax credit as a listed transaction and the COVID-ERTC promoter as a material advisor, subject to related disclosure and reporting requirements. 5. Extending the limitation on assessment for COVID-ERTC-related credits and refunds to 6 years after the relevant filing or claim date. The bill also includes effective dates, transition rules, and provisions to avoid negative inferences.

Budget and Finance

https://www.congress.gov/bill/118th-congress/house-bill/9738/all-info