The Employee Retention Tax Credit (ERTC) was introduced as a lifeline for businesses during the COVID-19 pandemic. This was designed as a reward for employers who kept their workforce intact during the economic challenges of the times by offering a substantial tax credit refund. However, as businesses have sought to claim their refunds, disputes over eligibility, processing delays, and misinterpretations of guidelines have sparked a wave of lawsuits. For employers, navigating the legal complexities surrounding the ERTC refunds can be overwhelming, but by consulting with an experienced legal team like Levin Law, you can work to protect your business interests and determine if filing a lawsuit is the right legal option for you.
What is the Employee Retention Tax Credit (ERTC)?
The ERTC is a refundable tax credit that was introduced during the COVID-19 pandemic to help businesses survive the economic fallout. Intending to reward employers who retained their workforce during the pandemic, the credit is calculated based on qualified wages paid to employees.
Eligibility criteria include things like:
- Suspended Business: If any aspect of the business was suspended due to the mandated restrictions
- Revenue Decline: At least a 50% decline in gross revenue
- Employer Size: Businesses with 100 or fewer employees can claim credit for all wages, while larger employers can only claim wages for employees not providing services
If your business is facing unresolved issues with ERTC claims, it may be time to consult with an experienced legal team. By clarifying your eligibility and guiding you through the legal process, their expertise is invaluable when filing a successful lawsuit.
Why Are ERTC Refund Lawsuits on the Rise?
Many employers are frustrated with their ERTC refunds. Some have been waiting months, if not years, for the IRS to deliver. The IRS not only stopped processing claims in July of 2023, but they put a moratorium in place in September of 2023. These small businesses were relying on these funds to provide relief as they recovered from the pandemic.
Common reasons for delays:
- Complex Documentation Requirements: Businesses must provide extensive and precise documentation to support their claims.
- Heightened IRS Scrutiny: Attempting to prevent fraud, the IRS has increased its level of scrutiny on ERTC claims, resulting in more audits, reviews, and denials.
- Staffing Shortages: The staffing constraints that the IRS has faced slow the processing timeframes and increase any backlog issues.
- Conflicting Guidance and Regulations: The ever changing regulations and guidelines have created confusion and inconsistencies in claim filings and contributed to more disputes.
The impact of IRS processing backlogs and the following disputes have left challenges that highlight the importance of legal expertise when pursuing the funds your business deserves.
Legal Options for Taxpayers Facing ERTC Refund Delays
Resolving the dispute with the IRS when facing delays with your ERTC refund is about recovering the funds your business is entitled to. Taking legal action is a critical step towards addressing the financial challenges your business faces, receiving the funds necessary to support your business, and securing justice.
Steps Involved in Filing an ERTC Refund Lawsuit
- Case Evaluation with Levin Law: Consult with Levin Law attorneys to analyze your claim to determine the validity of your case and identify any potential errors.
- Gather Documentation: Keeping a detailed record of any supporting documents, including payroll records, tax filings, and correspondence with the IRS, will be vital to winning your case.
- Filing a Formal Complaint: With Levin Law, you can be assured that a detailed legal complaint will be filed outlining the dispute and advocating for your request for your refund.
- Negotiation or Trial: Depending on the specifics of your case, as they are all unique, your legal team may negotiate a settlement with the IRS or proceed to court to resolve the dispute.
As a business owner, you do not have the time or resources to continue exhausting every approach to get the refund your business is entitled to. Continuing to face prolonged processing times or even outright denials can result in significant financial hardships that could eventually shut down your business. Don't wait, contact Levin Law today to explore your legal options for a full refund.
How Levin Law, P.A. Can Help Expedite Your ERTC Refund
Supporting your business through the COVID-19 pandemic and all of the economic uncertainty is an impressive feat of determination and skill. If you are facing delays or denial of receiving your ERTC refund, contact Levin Law today to entrust your case to a legal team with a profound expertise in tax dispute resolution. From navigating complex IRS regulations to resolving disputes quickly, we know how to protect your business. With Levin Law by your side, you can confidently face the challenges of any delays with success on the horizon.
