Frost Law
On June 20, 2024, the Internal Revenue Service (IRS) issued a press release (IR-24-169) detailing their progress in reviewing over one million Employee Retention Credit (ERC) claims. This review was prompted following the implementation of a processing moratorium on September 14, 2023, due to concerns over widespread fraud and aggressive promotion of ineligible claims. In recent months, the IRS Commissioner, Daniel Werfel, indicated that some practitioners believe 95% of the claims raise concerns.
The moratorium remains in effect, with no current plan to lift it, as the IRS fears it may trigger another wave of improper claims due to aggressive marketing. In IR-24-169, the IRS stated they would begin to process claims filed before the moratorium in a first-in, first-out basis. They have stated that of these pre-moratorium claims, ten to twenty percent “show clear signs of being erroneous….” The recent actions of the IRS in issuing these disallowance letters without any information regarding how the claims have been deemed erroneous, have left many practitioners questioning the IRS’s methodology.
The IRS has started issuing disallowance letters, most commonly Letter 105C, for the identified high-risk claims. Common reasons cited in these letters include:
Recipients of disallowance letters generally have thirty days to respond from the date shown on the letter. It is crucial to act promptly and prepare a comprehensive response which includes all of the elements necessary to constitute a Formal Protest. Taxpayers should seek the services of a qualified professional to represent them in the Protest and Appeals Process.
Failure to respond within the 30-day window will result in the IRS denying your ERC claim.
If you have received a disallowance letter, contact our team immediately to ensure your response is timely and thorough.
Frost Law attorneys have significant experience in Employee Retention Credit and tax controversy matters, ERC eligibility analysis, and refund claim disputes. If you have any questions regarding the IRS statement or your ERC claims, don't hesitate to reach out to us at (410) 862-2890 or schedule a confidential consultation with our team of tax attorneys.
On June 20, 2024, the Internal Revenue Service (IRS) issued a press release (IR-24-169) detailing their progress in reviewing over one million Employee Retention Credit (ERC) claims. This review was prompted following the implementation of a processing moratorium on September 14, 2023, due to concerns over widespread fraud and aggressive promotion of ineligible claims. In recent months, the IRS Commissioner, Daniel Werfel, indicated that some practitioners believe 95% of the claims raise concerns.
The moratorium remains in effect, with no current plan to lift it, as the IRS fears it may trigger another wave of improper claims due to aggressive marketing. In IR-24-169, the IRS stated they would begin to process claims filed before the moratorium in a first-in, first-out basis. They have stated that of these pre-moratorium claims, ten to twenty percent “show clear signs of being erroneous….” The recent actions of the IRS in issuing these disallowance letters without any information regarding how the claims have been deemed erroneous, have left many practitioners questioning the IRS’s methodology.
The IRS has started issuing disallowance letters, most commonly Letter 105C, for the identified high-risk claims. Common reasons cited in these letters include:
Recipients of disallowance letters generally have thirty days to respond from the date shown on the letter. It is crucial to act promptly and prepare a comprehensive response which includes all of the elements necessary to constitute a Formal Protest. Taxpayers should seek the services of a qualified professional to represent them in the Protest and Appeals Process.
Failure to respond within the 30-day window will result in the IRS denying your ERC claim.
If you have received a disallowance letter, contact our team immediately to ensure your response is timely and thorough.
Frost Law attorneys have significant experience in Employee Retention Credit and tax controversy matters, ERC eligibility analysis, and refund claim disputes. If you have any questions regarding the IRS statement or your ERC claims, don't hesitate to reach out to us at (410) 862-2890 or schedule a confidential consultation with our team of tax attorneys.
