Federal · Internal Revenue Service

Employee retention credit claim disallowed or examined

Letter 105C (ERC) · Letter 106C (ERC) · Letter 6612 · Letter 6577C

What it is: The IRS has disallowed, partly disallowed, or is examining an employee retention credit claimed on Form 941-X. The eligibility questions are the ones the notices and the revenue procedure set: a full or partial suspension of operations by government order, or the gross-receipts decline test, measured quarter by quarter, and qualified wages net of PPP forgiveness.
The clock it starts: A disallowance letter starts the two-year period to file a refund suit. Ask for an Appeals review within the window the letter states, typically 30 days, so the claim is heard before that period matters.
What a response has to establish: An eligibility analysis quarter by quarter: the order or the receipts figures, the dates, the wages, and the PPP coordination, with the documents.
Authority: Notice 2021-20
Notice 2021-49
Rev. Proc. 2021-33
Instructions for Form 941-X
IRC §6532

What CitedTax drafts for this notice

An Appeals request or examination response that establishes eligibility under the notices for each quarter claimed.

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