COVID-19 was a nightmare for the Internal Revenue Service, and the IRS still is experiencing plenty of “hauntings” from the pandemic.

It will be interesting to follow how the federal agency finally exits the continuing “horror show” affecting businesses.

One thing is certain: It is not going to be an easy pathway.

According to an Aug. 5 Wall Street Journal article published under the byline of the writer Richard Rubin, the federal tax agency erred in rejecting numerous COVID-era claims, tax advisers allege. The tax advisers in question allege that in the IRS’ first big batch of rejected claims for a pandemic-era tax credit — a controversial tax credit, nonetheless — there are obvious mistakes by the government amid the IRS’ behemoth struggle to separate legitimate refund requests from bogus claims. One of the paragraphs standing out in the Journal article is the following:

“The reported IRS errors underscore the agency’s difficulties as it plows through a backlog of 1.4 million tax returns, continuing the saga of the employee-retention tax credit, or ERC. Congress created the program in 2020 to help businesses stay afloat and keep workers connected to jobs, but the credit has been marked by widespread fraud, ineligible claims and aggressive marketing. The IRS placed a moratorium on processing new claims in September 2023.”

An Atlanta accountant, bemoaning the problem, was quoted in the Journal as saying “when there are errors in what is intended to be the easiest to identify and the low-hanging fruit, concern is through the roof.”

He was referring in part to a new sorting system the IRS built to evaluate returns, but which apparently is not as error-proof as the IRS would prefer and expect.

The kinds of problems surfacing include IRS denials to employers who allegedly were not operating a business during the pandemic, when they actually were, but did not file separate business tax returns.

Other denial letters alleged that businesses did not experience the required decline in gross receipts to be eligible for the benefit in question. According to the Journal, the credit is worth up to $26,000 per employee and has been a source of capital and frustration for small businesses and a headache for the IRS.

Congress ended the credit, generally, as of Sept. 30, 2021, after its having cost more than triple the original estimates — certainly information not a source of comfort to Americans who are concerned about the national debt.

A reasonable question is how much, if any, the IRS errors being alleged have impacted businesses in the Southern Alleghenies region. If there have been impacts based on suspected IRS errors, the Mirror would like to know — and, no doubt, so would other area businesses.

Perhaps the Blair County Chamber of Commerce could be helpful in gauging whether there has been a negative impact here and, if so, how widespread that impact might be. Perhaps the Chamber could email a questionnaire to its membership, as well as encourage non-members to get in touch about similar problems they might be having.

Some companies might believe they are alone in what they are experiencing when by no means are they alone.

All considered, could the government be holding up tens of billions of dollars in legitimate refunds from eligible small employers nationwide and, in fact, owe them interest?

“Stay tuned” seems like reasonable advice.