The IRS explained on a webpage published September 19, 2024, that you will have two years to appeal an IRS disallowance of your employee retention credit (ERC) claim.
It isn’t easy to type these words, but this is good news. Before this update, you faced the typical 30-day deadline under IRS administrative rules.
All is not rosy. The two-year deal is a slippery slope. As the IRS puts it on its page, you should dispute the IRS disallowance within 30 days to protect your two-year window to request an appeal or take the IRS to court.
And the appeal has a slippery slope, too. You can request the appeal when you answer the IRS denial and then send the IRS the additional information it asked for. This takes time away from your two-year window to resolve your claim and receive payment from the IRS.
Here’s how the IRS words the appeal request: “If you request an appeal, we [the IRS] will first consider your explanation and documents before sending your request to the IRS Independent Office of Appeals.” (Tick tock, the clock ticks.)
Two-Year Timeline
Requesting an appeal does not extend the two-year timeline.
The IRS says it can’t issue a refund or allow a credit after the two-year period unless you file suit during that period.
And then there’s this: “If you don’t file suit within the two-year period or sign an agreement with us [the IRS]
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
Let’s start with the premise that you have legitimate ERC claims that the IRS should have paid.
Now, you get IRS Letter 105-C, which means the IRS has disallowed or denied your legitimate ERC claims.
You have two choices:
- Answer the letter and also ask for an appeals review if the IRS denies your response.
- Sue the IRS in court.
