ERC Litigation
Businesses now have a powerful legal option when their Employee Retention Credit (ERC) claims face long delays or disallowances—they can sue the IRS. ERC was designed to help struggling employers survive during and recover from the COVID-19 pandemic. However, the government has failed to timely process and pay legitimate refund claims timely. Businesses that have claimed the credit and are entitled to a refund don’t have to wait passively to receive these funds. Instead, eligible employers can take legal action to compel the government to review the claim.
Latest on ERC Processing Time & Fraud Alerts
Learn more about ERC refund processing time updates and fraudulent ERC provider details released by the IRS in 2023 and 2024.
Understand Your ERC Options
Our ERC Practice is your one-stop destination for all things related to the Employee Retention Tax Credit. Whether you need a second opinion regarding eligibility, representation in an audit, or information about your ERC refund claim, our team of professionals are here to assist you every step of the way.
ERC Resource Center
Need assistance with your ERC claim? Learn what ERTC services fit your needs!
ERC Audits and Appeals
Has the IRS initiated an audit of your ERC claim or disallowed the credit? Get insights from experienced tax attorneys on how to properly evaluate and substantiate your claim.
Problems with ERC Provider or PEO
If you encountered roadblocks from your Professional Employer Organization (PEO) in filing your ERC claims or believe that an ERC company incorrectly analyzed and/or calculated your credit, there are legal remedies available.
Expedite Your ERC Refund
If your ERC refund is delayed which is causing an undue financial hardship, there are two ways we can help. First, we can try to expedite your claim through the Taxpayer Advocate Service (TAS) by filing a 911 claim. Second, we can file a refund suit in either the United States District Court or the Court of Federal Claims.
ERC Second Opinions, Withdrawals, and Voluntary Disclosures
If you have doubts about the accuracy of your existing ERTC claim or worry about potential audit risks, Frost Law offers second opinions and risk assessments to protect your business.
What is ERC Litigation?
Decision-makers considering this remedy should understand the litigation process and consider working with tax attorneys specializing in ERC cases to navigate the process.
Filing a Lawsuit Against the IRS for ERC Claims
Businesses can sue the IRS for ERC claims under two conditions:
- The IRS takes no action on the refund claim for a period of six months after it is filed; or
- The IRS sends a notice of claim disallowance (Letters 105C or 106C)
- Businesses who receive a disallowance have two years from the date of the disallowance to file their refund suit, regardless if they participated in the IRS appeals process
Why You Should Not Wait for Disallowance
The IRS's strict review process for pre-moratorium ERC claims signals potential ineligibility for many. Proactive legal action is now the most effective way to secure your rightful credit.
When you wait for a formal disallowance notice:
- You miss the chance for early intervention and to set the tone of the claim evaluation process
- You forfeit the right to a clean record before the court
- Cases going through the appeals process will be even more delayed
- If Appeals decides against your claims, your recourse would be litigation anyways
What Are the Steps for ERC Litigation?
Legal action against the IRS must meet specific procedural requirements. Businesses can improve their chances of recovering their Employee Retention Credit through litigation with proper preparation.
What Documents Do You Need?
Your ERC refund lawsuit needs detailed documentation to support the claim. The required paperwork includes:
- Copies of all Form 941 and Form 941-X submissions
- Payroll records that show qualified wages
- Proof of business effects during qualifying periods
- Financial statements that reflect revenue decline
- Copies of All Relief Upon Governmental Orders (if applicable)
- Your complete IRS correspondence history
Choosing the Appropriate Court
Businesses can file their ERC lawsuit in two federal venues. The U.S. District Court near their residence or business can be a convenient local option. The U.S. Court of Federal Claims in Washington, D.C. specializes in tax matters and serves as another choice.
How to File an ERC Lawsuit
The essential steps you need to follow when filing an ERC lawsuit:
- Wait for six months after filing your refund claim;
- Create and submit a comprehensive complaint that details your claim;
- Deliver legal notices to appropriate government officials;
- Complete all necessary court paperwork and pay the required fees; and
- Handle any communication from government representatives promptly
Tax Attorneys for ERC Litigation
ERC refund litigation requires specialized, legal support to succeed. A skilled ERC tax attorney can assess your claim's strength, represent your interest in matters before the court, and work collaboratively and efficiently with government attorneys.
Your case must follow strict procedural rules and deadlines. Tax attorneys who know ERC regulations can direct you through these requirements while building strong refund claim cases.
Get Help with ERC Litigation
Our qualified ERC attorneys will review your case and guide you through the litigation process. Contact our ERC tax attorneys today. Call (410) 497-5947 or fill out our contact form to schedule a consultation.
Do You Need a Second Opinion on Your ERC?
The ERC incentivized businesses to retain employees throughout the pandemic with a refundable payroll tax credit that has been a lifeline for many employers. However, fly-by-night return preparers and payroll processors, lacking scruples and a clear understanding of the CARES Act and subsequent legislation, are pushing business owners into over, or even under, claiming ERTC—and that can result in Form 941-X audits, which can then lead to serious consequences without proper documentation.
Our team has tracked pandemic relief legislation from PPP and EIDL in the beginning, through ERC claims and more. We are happy to help you understand what your business may be eligible to claim and can provide a second opinion if necessary.
Who will help you through your ERC Claim?
Meet the tax attorneys who can help you understand what to expect when claiming the ERTC and what to do if you are audited.
Partner Rebecca Sheppard, Esq.
As a former attorney for the Office of the Comptroller of Maryland, Rebecca’s current tax law practice is uniquely enhanced by the critical component of government perspective that she can offer when helping clients understand the full scope of what’s involved when maximizing tax credits and minimizing tax liabilities.
Partner Peter Haukebo, Esq.
Peter has provided individuals and businesses with sophisticated tax controversy assistance for more than a decade. In the ERC context, not only has Peter helped his own clients successfully navigate ERC requirements, he has committed countless hours to educating thousands of businesses, individuals, and other professionals across the nation about every aspect of the credit.
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Client Testimonials
- Farmhouse KC
- Barbara K.
