Scrutiny of a pandemic-era tax credit intensified this week as lawmakers, the IRS and tax professionals sought solutions for the wave of small businesses that wrongly claimed the tax break. The employee retention credit, or ERC, was enacted in 2020 to support small businesses affected by shutdowns during the Covid-19 pandemic and is worth thousands of dollars per employee. More from Personal Finance:IRS halts most unannounced visits to taxpayersIRS weighs guidance for employee retention tax creditHow to know if your business qualifies for the employee retention tax credit"Any time this amount of money is being handed out through the tax system, the bad actors show up, and they have shown up in large numbers," he said. As of July 26, the IRS said, it had roughly 506,000 unprocessed Form 941-X amended payroll tax returns. As the IRS works through its backlog of unprocessed amended returns, it's unclear how many small businesses may have wrongly claimed the credit.

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Persons: There's, Roger Harris, Padgett, Harris Organizations: ERC, shutdowns, Padgett Advisors, Finance, IRS