All Insights
Blog

New ERC Denial Letters from the IRS Should Be Taken with a Grain of Salt

Gil Mitchell, Tonya Rule, and Ben Peeler
August 2, 2024
IRS Paperwork

Key Takeaways

  • Last week, taxpayers started receiving denial letters for ERC claims.

Last week, taxpayers started receiving denial letters for ERC claims.

Unfortunately, these denial letters do not always include the proper language regarding your ability to appeal this decision. It’s important to know your rights and understand the IRS may be making an error in their determination. Form 941/Form 941x does not include information regarding how an entity qualifies for the ERC, thus the denial of a claim might be in error.

Additionally, the IRS announced in IR-2024-198 they will be reopening the ERC Voluntary Disclosure Program . While details haven’t been released, we encourage you to check your eligibility and ERC calculations, so you are able to apply within the given timeframe.

The penalties and interest on improper claims can be substantial and the fraud surrounding the ERC claims is said to be the largest tax fraud to date so rechecking all claims is extremely important.

 

Eide Bailly’s ERC team can help with your IRS denial letters, ERC eligibility, ERC calculation review, and more.

 

 

About the Author(s)

Gil Mitchell Photo

Gil Mitchell, EA

Senior Manager
Gil helps our clients by using his 36 years of IRS examination experience to guide each examination or tax controversy to the best possible solution. Gil's main focus today is leading the firm's Employee Retention Credit Controversy (ERC) Team to resolve our clients issues with both ERC examinations and unpaid claims.
325.437.4101
Tonya Rule

Tonya M. Rule, CPA

Partner/Affordable Care Act Practice Leader
Tonya has 20+ years public accounting experience providing tax and consulting services to individuals and businesses. She currently leads the Firm’s Affordable Care Act (ACA) services, leads the Firm’s Employee Retention Credit (ERC) services and leads the Firm’s Employer-Provided Child Care Credit (45F) services. For the ACA, she assists large employers with the compliance requirements, Forms 1094-C and 1095-C, and advises on technical ACA rules. In addition, she works with expanding small businesses to ensure they are measuring their employees correctly and selecting the best insurance plan for their business. Tonya regularly works with clients on various ACA IRS notices and has been successful in getting most of these penalties abated. For the ERC, she helps businesses correctly determine if they qualify and works with clients to comply with the technical rules. She also provides assistance with the IRS to support ERC claims. For the 45F credit, she provides technical guidance to employers on the benefits to both their employees and their stakeholders.
507.386.6239
Ben Peeler

Ben J. Peeler, J.D., CPA, LL.M.

Partner/IRS Tax Controversy Practice Leader
Ben joined the firm early in 2014 with many years of tax experience, both as an attorney and an accountant. He specializes in federal tax, controversy and procedure work, assisting with clients in the areas of income tax, estate and gift tax, property tax, sales and use tax, estate planning and many other tax matters. Ben's vast experience includes representing clients before the IRS, as well as representing the IRS before the U.S. Tax Court and during litigation before the federal district courts as a special assistant to the United States Attorney. Today, Ben leads the firm's IRS Practices & Procedures as a federal tax, controversy and procedure specialist and serves on Eide Bailly's National Tax Office team that is committed to helping clients resolve their tax issues.
801.456.5476

Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.