ERC Services
Employee Retention Credit Litigation
Key Takeaway
When the IRS wrongly denies a legitimate ERC claim and administrative remedies fail, litigation in U.S. Tax Court or federal district court may be the only path to recovering the credit you’re owed.
Sometimes the Only Way to Get What You’re Owed Is to Fight for It.
The IRS is denying ERC claims at an alarming rate, and not all of those denials are correct. When administrative remedies — protests, appeals, reconsideration — don’t produce the right outcome, litigation is the final option to recover your credit.
ERC litigation involves complex questions of tax law: what constitutes a ‘government order,’ how gross receipts are calculated, when a supply chain disruption qualifies, and how aggregation rules apply across related entities. These are questions that courts are beginning to address, and the outcomes are creating important precedent for every ERC claimant.
We file ERC cases in both the U.S. Tax Court and U.S. District Courts. The choice of forum depends on your specific situation, and having attorneys who are experienced in both venues is a significant advantage.
From Our Practice
We’ve taken ERC cases to U.S. Tax Court and federal district court when administrative remedies failed. When the IRS wrongly denies a legitimate ERC claim, litigation is sometimes the only path to recovery — and we’ve built a track record of favorable outcomes.
Talk to a Tax Attorney
Free 15-minute call. No obligation. We’ll tell you exactly where you stand.
What We Handle
ERC Litigation Services
Tax Court Petitions
We file petitions in U.S. Tax Court to challenge ERC disallowances. Tax Court allows you to litigate without paying the disputed amount first.
Federal Refund Suits
For refund claims, we file in U.S. District Court to recover credits the IRS has wrongfully withheld.
Eligibility Litigation
We litigate the most complex eligibility questions — government order interpretation, supply chain disruption analysis, and gross receipts methodology.
Penalty Litigation
The IRS is asserting significant penalties on ERC claims. We litigate penalty defenses including reasonable cause and professional reliance.
Multi-Entity Cases
Aggregation rules across related businesses create complex ERC issues. We litigate cases involving multiple related entities with coordinated claims.
Precedent-Setting Cases
ERC law is still being developed through litigation. We take cases that establish favorable precedent for the entire ERC claimant community.
Understanding the Process
ERC Litigation: Explained
When should I consider ERC litigation?
Litigation is appropriate when: (1) your ERC claim was denied and appeals failed, (2) your refund has been pending for an unreasonable time, (3) the IRS assessed penalties you dispute, or (4) you believe the IRS is misinterpreting the law in a way that affects your claim.
Not every denied claim should be litigated. We evaluate the legal merits, the dollar amount at stake, and the cost of litigation before recommending this path.
Tax Court vs. District Court: which is better?
Tax Court allows you to litigate without paying the disputed tax first — a significant advantage for large claims. District Court requires you to pay first and then sue for a refund, but offers jury trials and different procedural advantages.
We analyze both options for every client and recommend the forum that gives your case the best chance of success.
How long does ERC litigation take?
Tax Court cases typically take 12-24 months from petition to resolution. District Court cases can be faster or slower depending on the judge’s docket. Many cases settle after filing, which can significantly shorten the timeline.
What are the costs of ERC litigation?
Litigation costs more than audit defense or appeals, but for six- and seven-figure ERC claims, the investment is proportionate to the potential recovery. We provide detailed fee estimates before you commit and structure our engagements to align with your outcome.
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Not Sure Where You Stand?
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Why Brotman Law
ERC Litigation From Attorneys Who Know This Credit
$160M+ Defended
Our ERC practice spans the full life cycle — from original claims through audit, appeals, and litigation.
Court Experience
We litigate in Tax Court and federal district courts. We’re comfortable in both forums.
ERC Legal Expertise
We know the eligibility rules, the IRS guidance, and the emerging case law better than anyone. This is our practice.
Penalty Defense
We fight every penalty the IRS asserts, using reasonable cause, professional reliance, and constitutional arguments.
Honest Case Evaluation
We don’t litigate cases that can’t be won. If your claim doesn’t have merit, we’ll tell you — and discuss alternatives.
Full-Service ERC Practice
From initial claim preparation through final litigation, our team handles every aspect of ERC representation.
Learn More
ERC Litigation Guides & Resources
Frequently Asked Questions
ERC Litigation FAQs
Do I have to pay the disputed tax before going to court?
Not if you file in Tax Court — you can litigate without paying first. If you choose federal District Court, you generally need to pay the disputed amount first and then sue for a refund.
What are my chances of winning an ERC case in court?
It depends entirely on the merits of your claim. Legitimate claims with strong documentation and solid legal arguments have good prospects. We evaluate your case thoroughly before recommending litigation.
Can I recover my legal fees if I win?
In some cases, yes. Section 7430 of the Internal Revenue Code allows recovery of litigation costs (including attorney fees) from the government if you substantially prevail and the IRS’s position was not substantially justified.
Is there a deadline to file an ERC lawsuit?
Yes. You generally must file suit within two years of the IRS’s denial of your claim. For refund suits where no denial has been issued, the deadline runs from when you can demonstrate the IRS failed to act within a reasonable time.
Can I settle an ERC case after filing?
Yes, and many cases do settle. Filing suit often motivates the IRS to negotiate. We pursue settlement when it achieves a result equal to or better than what we’d expect from trial.
Do I need a different attorney for litigation?
No. We handle ERC cases from initial claim through trial. Having the same attorneys who understand your claim from the beginning provides continuity and efficiency throughout the litigation process.
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