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Many businesses in Oklahoma and across the country faced reduced revenue, stalled operations, and workforce disruptions during the COVID-19 pandemic. To support employers who continued paying their employees through this period, Congress created the Employee Retention Credit (ERC), a refundable payroll tax credit. For qualified businesses, the ERC can provide significant financial relief.
However, the process for claiming the credit is complex and has become more so due to the recent government shutdown. Many businesses are experiencing delayed responses to their claims due to both backlog and issues related to government staffing. If you do not take action soon, you could lose the opportunity to pursue your refund at all.
Alternatively, if you requested the credit and then received an IRS Letter 105C stating that your refund claim has been denied, you are not alone in this situation. A substantial number of businesses are receiving denials. The letter can give the impression that the matter has been fully resolved against you, but that is not always the case. In many circumstances, you may still have a clear path to challenge the decision and seek the refund you initially claimed.
IRS Letter 105C is a formal notice stating that the agency has determined your ERC refund claim should be disallowed. The letter should explain the reasoning behind the decision and outline your options for responding. It could indicate many things, including:
It is essential to understand that this letter also starts a two-year period in which you may file a lawsuit in federal court for a refund. If you do not take action within that timeframe, you may entirely lose the ability to contest the denial. This is also the reason why it is essential to seek legal counsel as soon as possible if your claim has been delayed due to the government shutdown, so you do not risk losing out on the money you are owed.
There are several common reasons the IRS may deny ERC claims. These include different possible problems such as:
In many cases, these issues can be corrected or clarified through the presentation of additional evidence or a structured appeal.
An attorney can review your Letter 105C along with the IRS explanation and determine the best strategy for responding. Representation may involve gathering payroll records, government order documentation, and financial statements to support your position. If you have not been denied yet, a lawyer could help with communications efforts to move the process forward toward receiving an answer as the IRS returns to full operations.
If appropriate, we can file a written protest and request a hearing with the IRS Independent Office of Appeals. Throughout the process, we communicate directly with IRS personnel on your behalf. If the dispute is not resolved, we can file a refund suit in federal court. Having legal counsel can help ensure that your response is accurate, supported, and timely.
Green Country Law Group knows how to take fast action to get you the money you deserve. We can represent employers in ERC disputes, audits, and refund actions. Your case will be handled by attorneys who focus on federal tax matters, not by a mass-processing service. We provide clear guidance, maintain strict awareness of legal deadlines, and work to protect your right to obtain the credit your business is eligible to receive.
A denial from the IRS does not have to be the outcome. You have the opportunity to challenge the decision and continue seeking the relief your business needs. Contact Green Country Law Group for a confidential review of your Letter 105C. We will explain your options and outline the steps to move forward with pursuing action regarding Employee Retention Tax Credit delays and denials. Contact us for help and take action immediately before you lose out on the refund you are owed.