IRS Covid-Credit Denial Letters Escalate Businesses’ Distress

A wave of new IRS letters denying pandemic-era tax credit claims is beginning to reach businesses, forcing them to go through a lengthy appeals process or sue the agency.

The path to disputing an employee retention credit claim denial doesn’t appear to be universal either, tax professionals who have seen the letters said, muddying an already-sensitive area for businesses, tax practitioners, and the IRS.

“One of the biggest concerns given the different language that’s coming forward is ‘do taxpayers know their options?’” said Justin Elanjian, a managing director at Stout, who has seen variations of the letters.

In some cases, ...