Letter 105-C means the IRS has formally denied your refund claim — and you now have two years to take them to court over it. For ERC claims, this letter is where most people give up. It is also the point where the claim becomes a legal case instead of a paperwork dispute.
By Sam Brotman, JD, LLM, MBA · Last updated August 2026
What this letter is
Letter 105-C (Notice of Claim Disallowance) is the IRS’s written denial of a claim for refund — for ERC, that means the credit you claimed on Form 941-X. It states which periods were denied and why, usually in a paragraph or less. A partial denial comes as Letter 106-C instead and works the same way for the portion denied.
You are not an outlier: in our own docket, 44 of 45 open denial matters arrived since 2024. The aggregates: the ERC docket study.
The two deadlines it starts
The letter gives you a short window to protest to IRS Appeals, and a two-year window under IRC § 6532(a)(1) to file a refund suit. Only the second one has teeth. A protest does not extend the two years — only a signed Form 907 agreement does — and Appeals is backlogged badly enough on ERC that protests can sit unanswered for a year or more. If you protested your denial and heard nothing back, your lawsuit clock has been running the entire time. Check the date on your letter today.
What you can still do
A denial is contestable two ways: a written protest asking Appeals to reconsider, or a refund lawsuit under IRC § 7422 in federal district court or the Court of Federal Claims. Which one fits depends on the size of the claim, the strength of the eligibility math, and how much of your two years remains. The full walkthrough — including the gross receipts test that wins most of these cases — is here: ERC claim denied: what you can still do.
What to gather before you call anyone
The denial letter itself (the date matters most), your Form 941-X filings, everything the ERC filing company gave you, and quarterly financial statements from 2019 through 2021 for every company under common ownership. With those, a tax attorney can tell you in days whether the claim is worth fighting.
If the letter is in your hand, book a free 15-minute call or call us at (619) 378-3138. Brotman Law has $160M+ in ERC claims handled and litigates denied claims in federal courts across the country.