IRS Push to Tackle Covid-Era Claim Backlog Threatened by Lawsuit

Jan. 31, 2025, 9:45 AM UTC

A lawsuit challenging the IRS’s automated system for processing Employee Retention Credit requests is threatening to upend the agency’s plan to make a sizable dent in the more than 1 million outstanding claims.

Former IRS Commissioner Daniel Werfel said at a conference late last year the IRS was looking to process 500,000 to 600,000 ERC claims in 2025.

The move follows a 2024 goal of about $10 billion in processed claims and aims to “finish the race” on the pandemic relief program, which had a backlog of 1.2 million claims as of late October.

Yet the agency, which uses a ...

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