{"id":287095,"date":"2026-04-30T06:00:26","date_gmt":"2026-04-30T10:00:26","guid":{"rendered":"https:\/\/futbolete.com\/us\/?p=287095"},"modified":"2026-04-30T06:00:26","modified_gmt":"2026-04-30T10:00:26","slug":"irs-deadline-employee-retention-credit-erc","status":"publish","type":"post","link":"https:\/\/futbolete.com\/us\/irs-deadline-employee-retention-credit-erc\/","title":{"rendered":"IRS Launches Simplified Option to Extend Deadline After Employee Retention Credit Denial"},"content":{"rendered":"

The Internal Revenue Service (IRS)<\/strong> put out an announcement on April 27, 2026, about a different administrative process for certain taxpayers whose Employee Retention Credit (ERC)<\/strong> applications were turned down. The measure, laid out in release IR-2026-58<\/strong>, gives people who got denied a way to ask for a time extension on their legal deadline without having to jump straight into a refund lawsuit in federal court.<\/p>\n

When the IRS says no to an ERC claim<\/strong>, either fully or partially, it sends the taxpayer a Letter 105-C (full denial) or a Letter 106-C (partial denial)<\/strong>. Starting from the date on that notice, the taxpayer gets two years to either sort things out through administrative channels or file a refund lawsuit in federal court if they disagree with the agency’s determination.<\/p>\n

What makes this situation tricky is that filing a protest or an appeal with the IRS Independent Office of Appeals does not pause or stretch out that two-year clock<\/strong>. Once the two years run out, the IRS legally cannot issue a refund<\/strong>, even if later on the appeals office decides the taxpayer should have gotten the credit.<\/p>\n

What taxpayers can do next<\/h2>\n

The April 27 announcement came because the agency spotted a group of taxpayers whose two-year deadlines were getting close to expiring<\/strong>. Denial notices sent out in bulk during the summer of 2024, around 28,000 letters <\/strong>by official counts, created a situation where many cases were still sitting in administrative review while the legal window to sue was running down.<\/p>\n

To use this new simplified procedure, a taxpayer has to meet two conditions at the same time. First: waiting for the IRS to review their response<\/strong> to the denial notice from a Letter 105-C or 106-C. Second: having six months or less left on the original two-year period.<\/p>\n

The mechanism works by submitting Form 907, which is called \u201cAgreement to Extend the Time to Bring Suit.\u201d Under the old rules, the IRS and a taxpayer could already agree in writing to extend the time to sue, as long as both signed the form before the original deadline expired.<\/p>\n

Application process: What the new mechanism covers<\/h2>\n

The simplified process removes some previous administrative hurdles. Taxpayers who meet the requirements can send Form 907 through the IRS’s Document Upload Tool, selecting the option for notice CP320B from a dropdown menu on the agency’s website.<\/p>\n

The IRS, on its end, will start mailing Notice CP320B (\u201cImportant Reminder Regarding Your Disallowed Employee Retention Credit (ERC) Claim\u201d) to taxpayers it identifies as eligible. That notice includes a QR code that leads directly to a fillable version of Form 907.<\/p>\n

IRS Signs Form 907 To Extend ERC Deadline<\/h2>\n

The agency will review each request and give \u201cdue consideration<\/strong>\u201d to properly executed Form 907 submissions. Taxpayers get written notice if the IRS accepts the extension. If approved, the agency sends back a countersigned form to the taxpayer or their authorized representative. The extension only becomes valid once the IRS signs the document.<\/p>\n

A key limitation is that this mechanism only applies to denials tied to Letters 105-C or 106-C for the ERC<\/strong>. Form 907 requests for denials related to other tax issues won’t be handled through this simplified route, so those taxpayers have to use regular IRS procedures instead.<\/p>\n

The Taxpayer Advocate Service, an independent office inside the IRS<\/strong>, said this new process fixes a situation that could have hurt taxpayer rights. The two-year deadline set in the Internal Revenue Code (IRC \u00a7 6532(a))<\/strong> keeps running while a case goes through IRS administrative levels, which in fiscal year 2025 took on average 337 days from the initial appeal request to a final resolution.<\/p>\n

Tax season 2026 numbers and an ongoing court case<\/h2>\n

Traditional news media kept putting out information about the 2026 tax season<\/strong> that formally ended April 15. The IRS reported that more than 80% of refunds were issued in less than 21 days, with an average of $3,521 per taxpayer<\/strong>, which represented an increase of about 11% from the previous period. Electronic filing hit rates above 98% of all returns submitted.<\/p>\n

Separately, a lawsuit filed by President Donald Trump against the IRS continues to move through the courts without a final resolution. The litigation, for approximately $10 billion<\/strong>, alleges the agency leaked the president’s confidential tax information to media outlets between 2018 and 2020. A federal judge expressed jurisdictional concerns about whether there is a genuine controversy between the parties, given that the president controls both ends of the litigation.<\/p>\n

The parties asked the court for a 90-day pause<\/strong> while they explore possible negotiated solutions. A hearing is scheduled for May 27 in Miami, where the judge will decide if the lawsuit meets the constitutional threshold to proceed.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Internal Revenue Service (IRS) put out an announcement on April 27, 2026, about a different administrative process for certain taxpayers whose Employee Retention Credit (ERC) applications were turned down. The measure, laid out in release IR-2026-58, gives people who got denied a way to ask for a time extension on their legal deadline without […]<\/p>\n","protected":false},"author":4,"featured_media":287096,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":{"format":"standard","override":[{"template":"1","parallax":"1","fullscreen":"1","layout":"right-sidebar","sidebar":"default-sidebar","second_sidebar":"default-sidebar","sticky_sidebar":"1","share_position":"hide","share_float_style":"share-monocrhome","show_featured":"1","show_post_meta":"1","show_post_author":"1","show_post_date":"1","post_date_format":"custom","post_date_format_custom":"d\/m\/Y H:i","show_post_category":"1","show_post_reading_time":"0","post_reading_time_wpm":"300","post_calculate_word_method":"str_word_count","show_zoom_button":"0","zoom_button_out_step":"2","zoom_button_in_step":"3","show_post_tag":"1","number_popup_post":"1","show_author_box":"0","show_post_related":"1","show_inline_post_related":"1"}],"image_override":[{"single_post_thumbnail_size":"no-crop","single_post_gallery_size":"crop-715"}],"trending_post_position":"meta","trending_post_label":"Trending","sponsored_post_label":"Sponsored by","disable_ad":"0","subtitle":"Taxpayers with denied retention credit can ask for more time without going to court. Here's what to do next"},"jnews_primary_category":[],"footnotes":""},"categories":[1],"tags":[44],"class_list":["post-287095","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-irs"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/posts\/287095","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/comments?post=287095"}],"version-history":[{"count":1,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/posts\/287095\/revisions"}],"predecessor-version":[{"id":287097,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/posts\/287095\/revisions\/287097"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/media\/287096"}],"wp:attachment":[{"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/media?parent=287095"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/categories?post=287095"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/futbolete.com\/us\/wp-json\/wp\/v2\/tags?post=287095"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}