What's Happening?
The Internal Revenue Service (IRS) has introduced a new option for taxpayers to request more time to resolve disallowed Employee Retention Credit (ERC) claims. Taxpayers who have received a disallowance notice (Letter 105-C or 106-C) and have six months
or less remaining in their two-year period to file a lawsuit can now submit Form 907 to extend this period. This extension allows the IRS more time to consider the disallowance administratively and provides taxpayers additional time to file suit if necessary. The IRS is sending Notice CP320B to eligible taxpayers, and detailed instructions are available on the IRS website.
Why It's Important?
This development is significant for taxpayers who are at risk of losing their right to a refund due to the expiration of the statutory deadline. By allowing an extension, the IRS aims to prevent unnecessary litigation and provide taxpayers with a fair opportunity to resolve their claims. This move is expected to alleviate pressure on the IRS Independent Office of Appeals and streamline the process for handling ERC claims. It reflects the IRS's commitment to taxpayer rights and its efforts to address administrative delays that could otherwise result in unfair outcomes.
What's Next?
Taxpayers eligible for the extension must act promptly to submit Form 907 before their deadline expires. The IRS will continue processing ERC claims and appeals according to established procedures. Taxpayers are encouraged to review their disallowance notices and seek guidance from the IRS website or contact the IRS directly for further assistance. The IRS's decision to offer this extension may lead to similar measures for other tax-related issues, as it seeks to improve its administrative processes and taxpayer services.
