IRS Guidance on Employee Retention Credit Challenged on Appeal

Arizona tax advisory firm Stenston Tamaddon LLC brought its attack on one of the major implementing documents of the Employee Retention Credit to the Ninth Circuit.

Notice 2021-20, which provided guidance for eligibility and application of the pandemic-era tax credit, must be vacated because it “effectively amended the ERC statute by adding requirements Congress never intended,” StenTam said in its opening brief, filed Wednesday. Implementation of the guidance caused the IRS to disallow the ERC to a large swath of businesses seeking the credit.

The ERC, created by the Coronavirus Aid, Relief, and Economic Security Act, provided a tax ...