IRS has again failed Main Street with handling of pandemic-era program

Gil Bonifaz has been through a lot. 

As a 4th generation restauranteur, his family restaurant has been employing dozens of Texans at Herrera’s Tex-Mex and serving delicious fajitas since 1971 in the heart of Texas’s 24th District. After pandemic-era restrictions reduced his restaurant’s revenue, he could not keep up with rising rents, accountant fees and medical bills brought on by his wife’s fight with cancer.

In 2020, Gil was projected to generate $1 million in revenue, but, through no fault of his own, brought in only $400,000. As he stretched to keep his 15 employees on the payroll, the $100,000 loan he received through the Paycheck Protection Program was not enough to cover the impact of the pandemic. Gil called it “a Band-Aid on a bullet wound.” After waiting months for the Internal Revenue Service (IRS) to disburse Employee Retention Credit (ERC) funds, Gil and his family were forced to close their doors. In Gil’s words, “It’s safe to say I would still be in business if the ERC had gone through.” Ironically, this is what the ERC was created to prevent in the first place.

Gil’s situation is quite common. Many small businesses still haven’t received the Employee Retention Credit relief promised to them for tax years 2020 and 2021. The ERC was designed to be a lifeline for small businesses devastated by the pandemic and subsequent government mandates, allowing eligible job creators who kept workers on the payroll during COVID-19 to claim a tax credit to offset some of their payroll costs. 

As a result of the IRS’s failure to process ERC claims, not only are more than 1 million business owners left waiting, but it also delays identifying and denying fraudulent claims. That’s despite the 90,000 employees currently at the IRS’s disposal — more employees than Customs and Border Protection and the FBI.

For mom-and-pop business owners like Gil, who kept paychecks flowing to their employees when there were no customers, the recovery from the pandemic is ongoing. As champions for pro-growth policies empowering our job creators, Republicans must ensure the tax relief promised to these entrepreneurs is finally delivered. 

We shouldn’t punish small business owners who did the right thing and kept people on their payroll. Equally, we cannot allow the IRS to fail once again to go after fraudsters.

As a member of the House Small Business Committee and the House Ways and Means Committee with jurisdiction over the IRS, I am working to hold the IRS accountable on behalf of constituents like Gil, and all small business owners who are wrongfully punished by the IRS’s incompetence. 

While Gil’s doors are closed for now, he still hopes to receive the funds to repay his back rent, reopen Herrera’s doors, and “pass the business on to the 5th generation of Bonifaz’s.”

We must not leave Gil and the other 1 million impacted job creators behind. The IRS must finish delivering the relief promised to small businesses like Gil’s nationwide while identifying and preventing fraud.

Beth Van Duyne represents the 24th District of Texas and is a member of the Ways and Means Committee and Small Business Committee.