ERC LITIGATION
The IRS may be slow to process Employee Retention Tax Credit claims, but that doesn’t mean you have to wait indefinitely—or worse, never receive your credit at all. With a deep background in tax controversy and extensive experience handling ERC cases, we understand the legal strategies necessary to challenge IRS delays and denials. If your refund is stuck in limbo, your hands are not tied—you have the right to take legal action to move your claim out of the IRS’s hands and into the hands of a federal judge.
SECURE YOUR REFUND
We save you money in the current tax year and create savings that will undoubtedly send a ripple through the coming years. In the long run, thousands of dollars will grow to hundreds of thousands, then millions in savings.
STRATEGIC APPROACH
We help you keep more money in your pockets for investing, saving, or anything else that contributes to a good life. Our attorneys strive to reduce your lifetime tax liability by implementing different legal tax optimization strategies.
CLARITY AND RESOLUTION
We work with you to ensure every item is correctly captured on your tax returns allowing you to enjoy greater peace of mind.
Overview
The next nine months (until the end of 2025) will be critical for businesses that have yet to receive their Employee Retention Tax Credit (ERC). If the IRS has failed to address your ERC claim within six months of submission, you have the legal right to take action by filing a lawsuit against them in federal district court or the Court of Federal Claims.
At Brotman Law, we are advising businesses to consider pursuing legal action as a way to regain control over their claim. By filing a lawsuit, you remove the process from the IRS’s hands and place your case before a neutral federal judge. This ensures a fair and timely resolution, with a clear end date—something the IRS can’t guarantee.
At Brotman Law, we’ve filed hundreds of ERC applications and understand the complexities of these claims. With a deep background in tax controversy and extensive experience handling ERC cases, we understand the legal strategies necessary to challenge IRS delays.
How to Accelerate and Protect Your ERC Claim
Navigating the ERC Process: Applications, Audits, and More
What Else Should I Know?
Here are some indicators that litigation could be right for you:
Large Claim Size: Your ERC claim is $250,000 or more, ideally $500,000 or more. The larger your claim, the more likely the IRS will take it seriously and be motivated to resolve it.
Business Structure: Your business is dependent on a physical location or human capital for producing goods or services. This could include businesses in industries like retail, hospitality, or manufacturing.
Impact from COVID-19: Your business was impacted by government orders related to COVID-19. While the IRS safe harbor provides guidance, it is not a guarantee. However, businesses that experienced a drop in revenue of more than 10% or struggled to produce goods or services are more likely to qualify.
Documented Impact: You can provide evidence of the impact on your business, such as financial records, operational information, or employee witness statements. The more concrete your evidence, the stronger your case.
While federal litigation is typically not the most cost-effective option due to its lengthy nature and high expenses, the situation surrounding the Employee Retention Tax Credit (ERC) is unlike most others. For some businesses, pursuing litigation against the IRS presents a unique strategic opportunity.
In the current environment, early results in federal court show that the government is more likely to settle ERC cases rather than litigate them. The IRS is concerned about the possibility of a negative court decision, which could set a nationwide precedent and open the floodgates for even more lawsuits. Because of this, they are more inclined to settle cases quickly, rather than risk a ruling that could harm their position in handling ERC claims across the country.
If your business was impacted by COVID-19 restrictions, there is a strong case to be made for ERC relief. Federal court judges have shown that they are likely to side with businesses in these types of cases, especially when there is clear evidence that government orders directly affected operations. Additionally, if you choose litigation, you have the option to have your case decided by a jury in federal district court.
With the IRS focused on avoiding massive litigation, we believe the timing is right to press your claim. In the right circumstances, litigation can be a powerful tool to move your case forward and push the IRS to settle more quickly than they would under normal circumstances.
- File a Timely Refund Claim: Ensure your Forms 941-X are filed within the applicable statute of limitations (usually three years from the original Form 941 or two years from tax payment).
- Wait for IRS Response: If the IRS doesn’t respond to your claim within six months, you can proceed to file a lawsuit.
- Initiate a Lawsuit: If the IRS denies your claim or fails to respond within six months, you can file a lawsuit in federal district court or the Court of Federal Claims.
- Discovery/Exchange Documentation: Both sides exchange documents and discuss the claim’s merits, potentially leading to a resolution or compromise.
- Negotiate Settlement/Alternative Dispute Resolution: Judges often encourage settlement, mediation, or arbitration to resolve the case before going to trial.
- Motion for Summary Judgment: If resolution fails, one party may file a motion asking the court to decide based on written submissions.
- Trial: If needed, the case goes to trial where the plaintiff presents their case in court.
- Decision: The judge or jury will make the final decision on the case.
WE KNOW OUR STUFF
While most ERC processors lack tax expertise and understanding of IRS negotiations, our team stands apart. We have spent the entirety of our years in business dealing with the IRS, helping clients negotiate payment plans, guiding clients through audits, and appealing audit decisions. Our team understands ERC and the IRS, giving us a clear advantage when it comes to ERC litigation.
PROVEN SUCCESS
At Brotman Law, we have a proven track record of success in tax litigation and controversy resolution. We have represented clients in complex tax matters, including federal court cases, where we’ve demonstrated our ability to secure favorable outcomes. Our experience navigating these intricate legal processes allows us to offer clients reliable and strategic solutions to their ERC claims.
TAILORED APPROACH
We understand that every business is unique, and your ERC case deserves a personalized approach. Unlike larger firms that treat cases like a number, we take the time to understand your business’s specific needs and challenges. By tailoring our strategy to your circumstances, we ensure that we’re giving you the best possible chance at a timely and favorable resolution.
Our Clients Will Tell You: We Get Results.
Tax Strategies, Case Studies, and Thought Leadership
Hundreds of $1,000,000s
Saved in Tax Penalties
100+
Appeal Victories
$1B+
Saved in Taxes
150+
Multimillion and billion-dollar corporate transactions
11+
Tax Services
400+
Clients represented in an audit
$160M+
in ERC Tax Credits
Our Thought Leadership Has Appeared In
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Book a Free 15-Minute Assessment Call
Set up a quick call with our firm’s concierge to see if we’ll be able to help you. The whole process will take 15 minutes or less.
STILL HAVE QUESTIONS?
No, filing a lawsuit against the IRS does not put you on a federal watchlist or expose you to retaliation. It is your legal right to pursue litigation, and the process is impartial, with cases handled by federal judges who are neutral parties.
Litigation offers a way to move your case forward by taking it out of the IRS’s hands and placing it before a neutral federal judge. The IRS is often slow to act, and federal court has shown a willingness to settle ERC cases more quickly than the IRS would process them.
Brotman Law has extensive experience with tax controversy and IRS negotiations. Our team is well-versed in handling ERC claims and understands the legal strategies needed to navigate the complexities of the IRS, giving us a clear advantage in ERC litigation.