IRS Pandemic Tax Credit Guidance Survives Procedural Challenge

The IRS’s guidance for reviewing employee retention credit claims complied with the Administrative Procedure Act, a federal district court ruled.

Stenson Tamaddon LLC failed to convince the US District Court for the District of Arizona that the IRS lacked an adequate legislative basis for its interpretation of criteria for evaluating an ERC claim. Judge Steven P. Logan determined on June 20 that the IRS’s March 2021 notice made no additions to the statute, but instead parsed the precise meaning of the language Congress had provided to create its pandemic credit program.

Lawmakers established the ERC to provide employers economic relief ...