II 

118TH CONGRESS 

2D SESSION S. 5079 

To provide for special enforcement provisions with respect to COVID-related 

employee retention credit claims, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 18, 2024 

Mr. ROMNEY (for himself, Mr. MANCHIN, and Mr. TILLIS) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To provide for special enforcement provisions with respect 

to COVID-related employee retention credit claims, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘ERTC Repeal Act of 

5 2024’’. 


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1 SEC. 2. ENFORCEMENT PROVISIONS WITH RESPECT TO 

2 COVID-RELATED EMPLOYEE RETENTION 

3 CREDITS. 

4 (a) INCREASE IN ASSESSABLE PENALTY ON COVID– 

5 ERTC PROMOTERS FOR AIDING AND ABETTING UNDER6 STATEMENTS OF TAX LIABILITY.— 

7 (1) IN GENERAL.—If any COVID–ERTC pro8 moter is subject to penalty under section 6701(a) of 

9 the Internal Revenue Code of 1986 with respect to 

10 any COVID–ERTC document, notwithstanding 

11 paragraphs (1) and (2) of section 6701(b) of such 

12 Code, the amount of the penalty imposed under such 

13 section 6701(a) shall be the greater of— 

14 (A) $200,000 ($10,000, in the case of a 

15 natural person), or 

16 (B) 75 percent of the gross income derived 

17 (or to be derived) by such promoter with re18 spect to the aid, assistance, or advice referred 

19 to in section 6701(a)(1) of such Code with re20 spect to such document. 

21 (2) NO INFERENCE.—Paragraph (1) shall not 

22 be construed to create any inference with respect to 

23 the proper application of the knowledge requirement 

24 of section 6701(a)(3) of the Internal Revenue Code 

25 of 1986. 


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1 (b) FAILURE TO COMPLY WITH DUE DILIGENCE RE2 QUIREMENTS TREATED AS KNOWLEDGE FOR PURPOSES

3 OF ASSESSABLE PENALTY FOR AIDING AND ABETTING

4 UNDERSTATEMENT OF TAX LIABILITY.—In the case of 

5 any COVID–ERTC promoter, the knowledge requirement 

6 of section 6701(a)(3) of the Internal Revenue Code of 

7 1986 shall be treated as satisfied with respect to any 

8 COVID–ERTC document with respect to which such pro9 moter provided aid, assistance, or advice, if such promoter 

10 fails to comply with the due diligence requirements re11 ferred to in subsection (c)(1). 

12 (c) ASSESSABLE PENALTY FOR FAILURE TO COMPLY

13 WITH DUE DILIGENCE REQUIREMENTS.— 

14 (1) IN GENERAL.—Any COVID–ERTC pro15 moter which provides aid, assistance, or advice with 

16 respect to any COVID–ERTC document and which 

17 fails to comply with due diligence requirements im18 posed by the Secretary with respect to determining 

19 eligibility for, or the amount of, any COVID-related 

20 employee retention tax credit, shall pay a penalty of 

21 $1,000 for each such failure. 

22 (2) DUE DILIGENCE REQUIREMENTS.—Except 

23 as otherwise provided by the Secretary, the due dili24 gence requirements referred to in paragraph (1) 


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1 shall be similar to the due diligence requirements 

2 imposed under section 6695(g). 

3 (3) RESTRICTION TO DOCUMENTS USED IN

4 CONNECTION WITH RETURNS OR CLAIMS FOR RE5 FUND.—Paragraph (1) shall not apply with respect 

6 to any COVID–ERTC document unless such docu7 ment constitutes, or relates to, a return or claim for 

8 refund. 

9 (4) TREATMENT AS ASSESSABLE PENALTY, 

10 ETC.—For purposes of the Internal Revenue Code of 

11 1986, the penalty imposed under paragraph (1) shall 

12 be treated in the same manner as a penalty imposed 

13 under section 6695(g). 

14 (5) SECRETARY.—For purposes of this sub15 section, the term ‘‘Secretary’’ means the Secretary 

16 of the Treasury or the Secretary’s delegate. 

17 (d) ASSESSABLE PENALTIES FOR FAILURE TO DIS18 CLOSE INFORMATION, MAINTAIN CLIENT LISTS, ETC.— 

19 For purposes of sections 6111, 6112, 6707 and 6708 of 

20 the Internal Revenue Code of 1986— 

21 (1) any COVID-related employee retention tax 

22 credit (whether or not the taxpayer claims such 

23 COVID-related employee retention tax credit) shall 

24 be treated as a listed transaction (and as a report25 able transaction) with respect to any COVID–ERTC 


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1 promoter if such promoter provides any aid, assist2 ance, or advice with respect to any COVID–ERTC 

3 document relating to such COVID-related employee 

4 retention tax credit, and 

5 (2) such COVID–ERTC promoter shall be 

6 treated as a material advisor with respect to such 

7 transaction. 

8 (e) COVID–ERTC PROMOTER.—For purposes of 

9 this section— 

10 (1) IN GENERAL.—The term ‘‘COVID–ERTC 

11 promoter’’ means, with respect to any COVID– 

12 ERTC document, any person which provides aid, as13 sistance, or advice with respect to such document 

14 if— 

15 (A) such person charges or receives a fee 

16 for such aid, assistance, or advice which is 

17 based on the amount of the refund or credit 

18 with respect to such document and, with respect 

19 to such person’s taxable year in which such per20 son provided such assistance or the preceding 

21 taxable year, the aggregate gross receipts of 

22 such person for aid, assistance, and advice with 

23 respect to all COVID-ERTC documents exceeds 

24 20 percent of the gross receipts of such person 

25 for such taxable year, or 


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1 (B) with respect to such person’s taxable 

2 year in which such person provided such assist3 ance or the preceding taxable year— 

4 (i) the aggregate gross receipts of 

5 such person for aid, assistance, and advice 

6 with respect to all COVID–ERTC docu7 ments exceeds 50 percent of the gross re8 ceipts of such person for such taxable year, 

9 or 

10 (ii) both— 

11 (I) such aggregate gross receipts 

12 exceeds 20 percent of the gross re13 ceipts of such person for such taxable 

14 year, and 

15 (II) the aggregate gross receipts 

16 of such person for aid, assistance, and 

17 advice with respect to all COVID– 

18 ERTC documents (determined after 

19 application of paragraph (3)) exceeds 

20 $500,000. 

21 (2) EXCEPTION FOR CERTIFIED PROFESSIONAL

22 EMPLOYER ORGANIZATIONS.—The term ‘‘COVID– 

23 ERTC promoter’’ shall not include a certified profes24 sional employer organization (as defined in section 

25 7705). 


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1 (3) AGGREGATION RULE.—For purposes of 

2 paragraph (1)(B)(ii)(II), all persons treated as a 

3 single employer under subsection (a) or (b) of sec4 tion 52 of the Internal Revenue Code of 1986, or 

5 subsection (m) or (o) of section 414 of such Code, 

6 shall be treated as 1 person. 

7 (4) SHORT TAXABLE YEARS.—In the case of 

8 any taxable year of less than 12 months, paragraph 

9 (1) shall be applied with respect to the calendar year 

10 in which such taxable year begins (in addition to ap11 plying to such taxable year). 

12 (f) COVID–ERTC DOCUMENT.—For purposes of 

13 this section, the term ‘‘COVID–ERTC document’’ means 

14 any return, affidavit, claim, or other document related to 

15 any COVID-related employee retention tax credit, includ16 ing any document related to eligibility for, or the calcula17 tion or determination of any amount directly related to 

18 any COVID-related employee retention tax credit. 

19 (g) COVID-RELATED EMPLOYEE RETENTION TAX

20 CREDIT.—For purposes of this section, the term 

21 ‘‘COVID-related employee retention tax credit’’ means— 

22 (1) any credit, or advance payment, under sec23 tion 3134 of the Internal Revenue Code of 1986, 

24 and 


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1 (2) any credit, or advance payment, under sec2 tion 2301 of the CARES Act. 

3 (h) LIMITATION ON CREDIT AND REFUND OF

4 COVID-RELATED EMPLOYEE RETENTION TAX CRED5 ITS.—Notwithstanding section 6511 of the Internal Rev6 enue Code of 1986 or any other provision of law, no credit 

7 or refund of any COVID-related employee retention tax 

8 credit shall be allowed or made after January 31, 2024, 

9 unless a claim for such credit or refund is filed by the 

10 taxpayer on or before such date. 

11 (i) AMENDMENTS TO EXTEND LIMITATION ON AS12 SESSMENT.— 

13 (1) IN GENERAL.—Section 3134(l) of the Inter14 nal Revenue Code of 1986 is amended to read as fol15 lows: 

16 ‘‘(l) EXTENSION OF LIMITATION ON ASSESSMENT.— 

17 ‘‘(1) IN GENERAL.—Notwithstanding section 

18 6501, the limitation on the time period for the as19 sessment of any amount attributable to a credit 

20 claimed under this section shall not expire before the 

21 date that is 6 years after the latest of— 

22 ‘‘(A) the date on which the original return 

23 which includes the calendar quarter with re24 spect to which such credit is determined is filed, 


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1 ‘‘(B) the date on which such return is 

2 treated as filed under section 6501(b)(2), or 

3 ‘‘(C) the date on which the claim for credit 

4 or refund with respect to such credit is made. 

5 ‘‘(2) DEDUCTION FOR WAGES TAKEN INTO AC6 COUNT IN DETERMINING IMPROPERLY CLAIMED

7 CREDIT.— 

8 ‘‘(A) IN GENERAL.—Notwithstanding sec9 tion 6511, in the case of an assessment attrib10 utable to a credit claimed under this section, 

11 the limitation on the time period for credit or 

12 refund of any amount attributable to a deduc13 tion for improperly claimed ERTC wages shall 

14 not expire before the time period for such as15 sessment expires under paragraph (1). 

16 ‘‘(B) IMPROPERLY CLAIMED ERTC

17 WAGES.—For purposes of this paragraph, the 

18 term ‘improperly claimed ERTC wages’ means, 

19 with respect to an assessment attributable to a 

20 credit claimed under this section, the wages 

21 with respect to which a deduction would not 

22 have been allowed if the portion of the credit to 

23 which such assessment relates had been prop24 erly claimed.’’. 


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1 (2) APPLICATION TO CARES ACT CREDIT.—Sec2 tion 2301 of the CARES Act is amended by adding 

3 at the end the following new subsection: 

4 ‘‘(o) EXTENSION OF LIMITATION ON ASSESSMENT.— 

5 ‘‘(1) IN GENERAL.—Notwithstanding section 

6 6501 of the Internal Revenue Code of 1986, the lim7 itation on the time period for the assessment of any 

8 amount attributable to a credit claimed under this 

9 section shall not expire before the date that is 6 

10 years after the latest of— 

11 ‘‘(A) the date on which the original return 

12 which includes the calendar quarter with re13 spect to which such credit is determined is filed, 

14 ‘‘(B) the date on which such return is 

15 treated as filed under section 6501(b)(2) of 

16 such Code, or 

17 ‘‘(C) the date on which the claim for credit 

18 or refund with respect to such credit is made. 

19 ‘‘(2) DEDUCTION FOR WAGES TAKEN INTO AC20 COUNT IN DETERMINING IMPROPERLY CLAIMED

21 CREDIT.— 

22 ‘‘(A) IN GENERAL.—Notwithstanding sec23 tion 6511 of such Code, in the case of an as24 sessment attributable to a credit claimed under 

25 this section, the limitation on the time period 


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1 for credit or refund of any amount attributable 

2 to a deduction for improperly claimed ERTC 

3 wages shall not expire before the time period 

4 for such assessment expires under paragraph 

5 (1). 

6 ‘‘(B) IMPROPERLY CLAIMED ERTC

7 WAGES.—For purposes of this paragraph, the 

8 term ‘improperly claimed ERTC wages’ means, 

9 with respect to an assessment attributable to a 

10 credit claimed under this section, the wages 

11 with respect to which a deduction would not 

12 have been allowed if the portion of the credit to 

13 which such assessment relates had been prop14 erly claimed.’’. 

15 (j) EFFECTIVE DATES.— 

16 (1) IN GENERAL.—Except as otherwise pro17 vided in this subsection, the provisions of this sec18 tion shall apply to aid, assistance, and advice pro19 vided after March 12, 2020. 

20 (2) DUE DILIGENCE REQUIREMENTS.—Sub21 sections (b) and (c) shall apply to aid, assistance, 

22 and advice provided after the date of the enactment 

23 of this Act. 

24 (3) LIMITATION ON CREDIT AND REFUND OF

25 COVID-RELATED EMPLOYEE RETENTION TAX CREDVerDate Sep 11 2014 19:37 Sep 21, 2024 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S5079.IS S5079

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1 ITS.—Subsection (h) shall apply to credits and re2 funds allowed or made after January 31, 2024. 

3 (4) AMENDMENTS TO EXTEND LIMITATION ON

4 ASSESSMENT.—The amendments made by subsection 

5 (i) shall apply to assessments made after the date of 

6 the enactment of this Act. 

7 (k) TRANSITION RULE WITH RESPECT TO REQUIRE8 MENTS TO DISCLOSE INFORMATION, MAINTAIN CLIENT

9 LISTS, ETC.—Any return under section 6111 of the Inter10 nal Revenue Code of 1986, or list under section 6112 of 

11 such Code, required by reason of subsection (d) of this 

12 section to be filed or maintained, respectively, with respect 

13 to any aid, assistance, or advice provided by a COVID– 

14 ERTC promoter with respect to a COVID–ERTC docu15 ment before the date of the enactment of this Act, shall 

16 not be required to be so filed or maintained (with respect 

17 to such aid, assistance or advice) before the date which 

18 is 90 days after such date. 

19 (l) PROVISIONS NOT TO BE CONSTRUED TO CREATE

20 NEGATIVE INFERENCES.— 

21 (1) NO INFERENCE WITH RESPECT TO APPLICA22 TION OF KNOWLEDGE REQUIREMENT TO PRE-EN23 ACTMENT CONDUCT OF COVID-ERTC PROMOTERS, 

24 ETC.—Subsection (b) shall not be construed to cre25 ate any inference with respect to the proper applicaVerDate Sep 11 2014 19:37 Sep 21, 2024 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S5079.IS S5079

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1 tion of section 6701(a)(3) of the Internal Revenue 

2 Code of 1986 with respect to any aid, assistance, or 

3 advice provided by any COVID-ERTC promoter on 

4 or before the date of the enactment of this Act (or 

5 with respect to any other aid, assistance, or advice 

6 to which such subsection does not apply). 

7 (2) REQUIREMENTS TO DISCLOSE INFORMA8 TION, MAINTAIN CLIENT LISTS, ETC.—Subsections 

9 (d) and (k) shall not be construed to create any in10 ference with respect to whether any COVID-related 

11 employee retention tax credit is (without regard to 

12 subsection (d)) a listed transaction (or reportable 

13 transaction) with respect to any COVID–ERTC pro14 moter; and, for purposes of subsection (j), a return 

15 or list shall not be treated as required (with respect 

16 to such aid, assistance, or advice) by reason of sub17 section (d) if such return or list would be so re18 quired without regard to subsection (d). 

19 (m) REGULATIONS.—The Secretary (as defined in 

20 subsection (c)(5)) shall issue such regulations or other 

21 guidance as may be necessary or appropriate to carry out 

22 the purposes of this section (and the amendments made 

23 by this section). 

Æ 


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