New Road Map for disputing an IRS disallowance of your ERC

In its September 19, 2024, publication, the IRS said you will have two years to appeal an IRS disallowance of your employee retention credit (ERC) claim. This is good news. Before this update, you would have faced a typical 30-day deadline under IRS administrative rules.

But this may not be completely rosy as it appears. You may have to dispute the IRS disallowance within 30 days to protect your two-year window to request an appeal or move the court.

An appeal can be requested when you answer the IRS denial and then send additional information requested by the IRS. This takes time away from your two-year window to resolve your claim and receive payment from the IRS.

IRS says, “If you request an appeal, we will first consider your explanation and documents before sending your request to the IRS Independent Office of Appeals.

Two-year timeline

A request for appeal does not extend the two-year timeline. According to the IRS, it cannot give a refund or allow credit after the two year period except if you file a suit. Here the IRS says, “If you don’t file suit within the two-year period or sign an agreement with us extending the two-year period to file suit, you may lose your ability to receive a refund, even if Appeals has already made a favorable decision about your claim.

Takeaways

Start with the premise that you have legitimate ERC claims that the IRS should have paid.

If you get IRS letter 105-C, the IRS has disallowed or denied your legitimate ERC claims.

For further insights or assistance, we invite you to connect with us.