IRS Limbo on Covid-Era Credit Pause Poised to Spur Refund Suits

Businesses and nonprofits still waiting for their pandemic-era tax credit refunds are expected to turn to litigation at higher rates, given the IRS isn’t likely to lift a moratorium on processing new claims any time soon.

Following a review of the embattled employee retention credit program, the IRS said on June 20 it will keep its processing pause for claims filed since mid-September 2023 in place. Older less risky claims made before the moratorium are anticipated to start to be paid out later in the summer.

Taxpayers that can’t afford to wait or are running out of patience can sue ...