Why Is Your ERC Refund Still Delayed? Here’s What You Need to Know

If you filed for the Employee Retention Credit (ERC) and you’re still waiting — you’re not alone. Thousands of legitimate ERC claims are sitting untouched, delayed, or lost in a growing IRS backlog.

The credit was designed to provide relief to businesses impacted by COVID-19. But now, many of those same businesses are left wondering: Where is my ERC refund — and what can I do about it?

This chapter breaks down what’s behind the delays, why larger claims are affected most, and what your options are if you want to take control and move your ERC forward.

As of mid-2024, the IRS has paused or drastically slowed the processing of most ERC refunds. This includes many valid claims that were filed correctly and backed by strong documentation.

What’s going on?

• The IRS has implemented a tiered review system, prioritizing smaller and less complex claims first

• Larger refunds (typically $250K+) are flagged for manual review, often with no clear timeline

• Some claims are routed to new units or placed into “general suspense,” with no updates for months — or even years

In short: the system is jammed, and high-dollar claims are at the bottom of the stack.

While the IRS backlog is real, that’s not the only reason refunds are stuck.

The IRS has flagged an estimated 80% of ERC claims for further scrutiny — part of a nationwide crackdown on fraudulent or inflated filings. Many of those flagged claims are legitimate, but they get lumped into the same slow-moving review process.

The risk? Your valid refund sits idle with no updates or is quietly denied later, long after the window to fix the issue has passed.

If your ERC claim is worth $500,000 or more, you’re almost certainly facing longer delays. Here’s why:

• High-dollar refunds are routed to special IRS review teams

• The IRS often requests additional documentation — but doesn’t always notify you promptly

• Some claims may be referred to Criminal Investigation (CI) for review, even without any signs of fraud

This doesn’t mean your claim is invalid. It means the stakes are higher — and the IRS is moving cautiously.

The ERC was designed to restore working capital to businesses that kept their employees during COVID. But delays like this erode that value. Every month your refund sits unpaid, you lose access to funds you could be using for growth, hiring, or stability. Worse, the longer it sits, the more uncertainty grows — both for your financial planning and for the future of the credit itself.

This isn’t just about a delay. It’s about recognizing that the process, as it currently stands, isn’t built to move quickly. And more importantly, that you’re not stuck. You do have options — but they’re not all equal.

Here’s the truth: once your ERC claim is filed, you can’t “speed it up” through normal channels. Calling the IRS won’t help. Waiting longer won’t get you paid faster. But you do have options — including legal ones.

Here are five paths available if your claim is still in limbo:

1. Do Nothing

Many businesses choose to wait, hoping the refund arrives eventually. But there’s no guarantee of timing — and no deadline forcing the IRS to respond.

2. File with the Taxpayer Advocate Service (TAS)

TAS can help in cases of financial hardship or systemic delay, but they can’t force the IRS to act. This is more of a pressure valve than a resolution strategy.

3. Contact Your Member of Congress

Sometimes this can help elevate your case, but most offices are handling thousands of similar requests. At best, this gets attention. Rarely does it lead to actual movement.

4. Traditional Refund Litigation

This is the standard legal route for claims that are either denied or delayed. It can work — but it’s often slow, expensive, and reactive. Many firms handle these cases in bulk, without tailoring their approach to the unique facts of each client’s situation.

5. ERC FastTrack Recovery

This is the path we’ve built at Brotman Law — and it’s different by design. ERC FastTrack is built to get results. It’s a proactive legal strategy that removes your claim from the IRS’s administrative gridlock and brings it into a forum where the government is required to respond. By moving the case to federal court, we create accountability, impose a timeline, and open the door to faster resolution — often without the need for drawn-out litigation.

If your claim has been pending for a year or more with no response, litigation may be your best (and only) path forward.

When you file a refund suit:

• Your case shifts from the IRS to the Department of Justice (DOJ)

• The government has 60 days to respond under federal law

• You gain leverage and structure — no more “wait and see”

Most valid claims settle in 6–12 months — often for 100% of the credit plus interest.

This isn’t about fighting the IRS. It’s about using your legal rights to get a decision — instead of being left in the dark.

For businesses with large, well-documented claims, FastTrack can shift things from reactive to proactive — without draining time or energy from your team.

In the next chapter, we’ll walk you through how ERC FastTrack actually works. From legal preparation to court filing and settlement, you’ll see what to expect — and why this process gives your refund a real path forward.

If you’re tired of waiting and want to resolve your ERC credit with clarity and confidence, keep reading.