After several weeks of all-time highs, ERC refunds massively dropped off this past week, further reinforcing the age-old paradox, "the only thing that is certain is nothing is certain.” Despite the fleeting highs, the IRS continues to perpetuate significant uncertainty for small businesses waiting for ERC checks.
📉 Following the two highest check volume weeks in the past twelve months, ERC refunds plummeted to 525, down from 1,152 refunds last week, a gut-wrenching 54% week-over-week decline.
📈 If there’s a silver lining in last week’s results, it’s that the average refund amount shot up to $193,772, the third highest week in the past year, and a 69% increase from the prior week’s average of $114,244.
As the 'ERC Killer' provision advances within the so-called 'Big, Beautiful Bill'—while the similarly nicknamed 'Big Beautiful Billy (Long)' moves through the Senate Finance Committee—ERC providers and their clients find themselves in a state of emotional turmoil. We’ll continue to keep our eyes peeled and ears to the street with all your spicy ERC updates!For a great follow on LinkedIn for ERC and legislative updates, check out Tim Parrish, Partner at Resolute Tax and President of the HIRE Coalition.
1. Big, Beautiful Bill Passes House Vote - House Republicans narrowly passed President Trump’s sweeping tax bill in a 215–214 vote, overcoming internal divisions with last-minute amendments aimed at uniting moderates and conservatives. The ERC Killer provisions and related expanded promoter penalties remain unchanged in the current draft of the bill. Every Democrat opposed the bill, joined by two GOP defectors, while one Republican voted "present." The legislation, over 1,000 pages long, includes a quadrupling of the SALT deduction cap to $40,000 for middle-income earners and accelerates Medicaid work requirements, among other major changes. Though Trump and Speaker Johnson hailed the passage as a historic win and urged swift Senate action, the bill faces challenges ahead, with several GOP senators demanding changes. Meanwhile, markets reacted with concern over the bill’s potential to balloon federal deficits, and a CBO analysis warned of benefits skewing toward the wealthiest households.
2. ERC Repeal Continues to Garner Harsh Criticism - According to a recent Tax Notes article, the provision in House Republicans’ new tax bill to retroactively end the ERC and extend the IRS audit window to six years is drawing sharp criticism from tax professionals, attorneys, and nonprofit leaders. While the bill aims to raise $6.3 billion by disallowing ERC claims filed after January 31, 2024, critics argue it unfairly penalizes small businesses and nonprofits that filed in good faith after navigating complex eligibility rules and IRS delays. Experts warn that the vague statute of limitations language could prolong uncertainty for years, burdening compliant taxpayers while failing to meaningfully deter fraud. The backlash underscores broader concerns about fairness and credibility in federal relief programs, especially for those who followed the rules and now risk retroactive clawbacks.
3. Billy Long Endures Lengthy Senate Confirmation Hearing - At his Senate finance confirmation hearing on May 20, 2025, which lasted well over two hours, former Congressman Billy Long, President Trump's nominee for IRS Commissioner, faced a mix of scrutiny, as well as praise and reverence. Despite lacking traditional tax administration experience, Long pledged to modernize the IRS by adopting private-sector practices and improving customer service. His nomination remains contentious, with Democrats expressing skepticism and Republicans offering cautious support.
Kenny's Conclusions
As we brace for another week of unpredictability, one thing is clear: the ERC rollercoaster shows no signs of slowing down. With refund volumes crashing, average check sizes spiking, and legislative threats looming, small businesses and ERC providers are left navigating a turbulent and uncertain landscape. Whether it’s the IRS’s latest hiccup or Capitol Hill’s next maneuver, TaxNow will be here to break it down, track the data, and keep you a step ahead. Buckle up, this summer’s shaping up to be a wild ride!
Signing off!
Kenny Dettman, CPA
Disclaimer: *𝘋𝘢𝘵𝘢 𝘴𝘦𝘵 𝘪𝘴 𝘧𝘳𝘰𝘮 𝘢𝘱𝘱𝘳𝘰𝘹𝘪𝘮𝘢𝘵𝘦𝘭𝘺 12,000 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴𝘦𝘴 𝘵𝘳𝘢𝘤𝘬𝘪𝘯𝘨 𝘌𝘙𝘊*
