IRS issues FAQs addressing Employee Retention Credits under OBBBA

By Evan Walters, Samuel Hamer, Edward Froelich, Michael Scarduzio and Matthew J. Blaney on November 5, 2025

The Internal Revenue Service (IRS) recently issued frequently asked questions (FAQs) addressing Employee Retention Credits (ERC) under the ERC compliance provisions of the One Big Beautiful Bill Act (OBBBA). Although not final guidance, “a taxpayer who reasonably and in good faith relies on these FAQs will not be subject to a penalty that provides a reasonable cause standard for relief, including a negligence penalty or other accuracy-related penalty, to the extent that reliance results in an underpayment of tax.”

Tags: employee retention credits, ERC, Internal Revenue Service, IRS, OBBBA, One Big Beautiful Bill Act

Evan Walters
Evan Walters focuses his practice on US and international taxation. He has experience across a wide range of issues involving corporate and partnership taxation. Read Evan Walters' full bio.

Samuel Hamer
Samuel (Sam) F. Hamer focuses his practice on US and international tax matters. Read Samuel Hamer's full bio.

Edward Froelich
Edward L. Froelich represents domestic and foreign public corporations, privately held companies, partnerships, trusts and individuals across the spectrum of federal tax controversies, including audits, trials and appeals. Ed’s clients include businesses, business owners and investors with operations and interests in the financial services, technology, real estate, healthcare and other industries. Read Edward Froelich's full bio.

Michael Scarduzio
Michael J. Scarduzio focuses his practice on US and international tax matters, particularly civil and criminal tax litigation. From audit to litigation, he represents taxpayers in all phases of tax controversy, including novel issues of first impression such as financial hedging transactions using a captive insurer, US tax implications of a foreign master-feeder fund’s investment activities and matters arising under Internal Revenue Code (IRC) Sections 7216 and 7212(a). Read Michael Scarduzio's full bio.