Case: IRS Lacked Authority to Approve Employee Retention Credit Refund Claim (E.D. Tenn.) (IRC §7122)

The IRS lacked authority to approve the taxpayer’s Employee Retention Credit (ERC) refund claim after referring the case to the Department of Justice (DOJ), a district court held, denying the taxpayer’s motion for partial summary judgment. Taxpayer, a restaurant company, filed suit seeking a refund of employment taxes arising from the ERC for several quarters in 2020 and 2021 related to the impact on its business from the COVID-19 pandemic. After the IRS referred the case to DOJ for defense, it erroneously approved some of the taxpayer’s refund claims. The court held that once the IRS referred the case to ...