US Urges Tossing Challenge to Employee Retention Credit Guidance

A payroll services firm should be unable to challenge the IRS’s guidance for evaluating employee retention credit claims because that guidance doesn’t impact whether the company will get its refund, the federal government said.

First Source Employee Management Inc., which provides payroll services to nursing and hospice care providers, sought to block the government’s use of agency guidance for determining ERC eligibility. The US moved to dismiss the company’s latter claim on Monday, arguing a nationwide injunction wouldn’t provide First Source any relief.

First Source sued the IRS for more than $20 million in employment tax refunds after it said ...