Covid Tax Credit Guidance Survives Federal Court Challenge (1)

A payroll services company doesn’t have standing to challenge IRS guidance on a controversial pandemic-era tax credit, a federal judge said.

First Source Employee Management, based in Ohio, wanted the court to nix an IRS notice about who can claim employee retention credits, arguing that the guidance was arbitrary and capricious. However, the firm hasn’t sufficiently argued that tossing this guidance would actually resolve its tax dispute with the IRS, according to a June 11 opinion from Judge Charles Fleming of the US District Court for the Northern District of Ohio.

As a part of its suit, First Source says ...