IRS Maintains ERC Moratorium Despite Pressure
Most firms treated the employee retention credit as a closed chapter months ago. The credit was claimed, some of it was clawed back, clients grumbled, and everyone moved on to the next filing season. A recent ruling on refund suits after ERC clawback suggests that chapter is not actually closed, and firms that assume it is are leaving both an opportunity and a risk sitting untouched.
Here is what changed. Courts have found that a taxpayer whose ERC was clawed back does not need to file a new administrative claim before bringing a refund suit. That sounds procedural, but it matters enormously in practice. It means clients who assumed the fight was over, and the money was gone for good, may still have a path to recover funds without restarting the entire claims process from scratch.
This ruling lands at a moment when a meaningful number of ERC claims are still working their way through IRS review, and clawback notices have been going out steadily for over a year. Many practitioners quietly wrote those clients off, assuming the credit, and the relationship, was done once the clawback letter arrived. That assumption is worth revisiting now, client by client, before someone else makes the call first.
For firms, this creates two separate conversations you need to be having right now. The first is with clients who had ERC claims clawed back and quietly accepted it. Many of them do not know this ruling exists, and if you are the one who tells them, you become the advisor who found money they thought was gone. That is not a small thing to a client who felt burned by the whole ERC saga.
The second conversation is internal. Before you pick up the phone, pull the file. Know the timeline, know when the original claim was filed, know when the clawback notice went out, and check the statute of limitations carefully. Refund suits have hard deadlines, and the excitement of a new opportunity is not an excuse to skip the procedural homework that protects both the client and the firm.
There is also a pricing question worth thinking through now, not after the first client calls. A clawback recovery engagement is not the same as the original ERC filing work, and it should not be priced the same way. Decide in advance whether this is a flat fee, a contingency arrangement, or an hourly engagement, and be ready to explain that clearly when the conversation starts.
Clients remember who fought for them after the check cleared, or in this case, after the check was taken back. This is not a theoretical opportunity, it is a list you can build this week. Here is where to start.
Start by pulling every client file with an ERC clawback notice from the past eighteen months into one list. Calculate the refund suit deadline for each file before you make a single call, since timing determines who you can actually help. Rank the list by clawback amount and by how close each deadline is, and start with whichever is more urgent. Decide your fee structure, flat fee, contingency, or hourly, before the first conversation happens, not during it, and document every conversation and next step directly in the file, since the procedural record is what protects the client and the firm if this ends up in front of a court.
Dr. Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
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