IRS Accused of ‘Summarily Disallowing’ Employee Retention Claims

The IRS is now disallowing Employee Retention Credit claims en masse after a months-long processing delay, undercutting the emergency program that was put in place to help businesses weather the Covid-19 pandemic, according to a new lawsuit filed Wednesday.

Phoenix-based tax preparation firm Stenson Tamaddon LLC and North Carolina-based ERC Today LLC—which helps companies navigate the ERC program— filed a complaint in the US District Court for the District of Arizona alleging the IRS is violating both the Administrative Procedure Act and the Fifth Amendment. The case also names IRS Commissioner Daniel Werfel and John McInelly, the IRS official overseeing ...