Two Tax Firms Seek to Block IRS’s Automatic Credit Processing

Tax advisory firms Stenson Tamaddon LLC and ERC Today LLC have asked an Arizona federal court to block the IRS from automatically processing a pandemic tax credit for their clients’ businesses, alleging the agency’s unlawfully used automated filters to sort and deny refunds.

The employee retention credit, created by Congress to encourage businesses to keep workers on payroll during the Covid-19 pandemic, has become major legal headache for the IRS after the agency temporarily paused the processing of new claims in order to combat fraud. The resulting delays sparked a wave refund suits from businesses awaiting their payouts.

StenTam and ...