The Pennsylvania-based law firm Ostroff Injury Law PC has filed a lawsuit against the US government, alleging that delays in processing their employee retention credit (ERC) claim are exacerbating challenges faced due to the Covid-19 pandemic. According to the complaint lodged in the US District Court for the Eastern District of Pennsylvania, the firm is seeking the release of a $790,000 ERC credit that has been delayed.
The ERC was a measure introduced during the Covid-19 pandemic to incentivize businesses to retain employees on their payrolls through tax credits. However, the Internal Revenue Service (IRS) halted the processing of new claims for the ERC in September 2023 due to an influx of fraudulent claims. This move by the IRS is part of an effort to curb potential scams, as detailed in a recent report.
The delay in processing has become a contentious issue for several businesses, including Ostroff Injury Law, which argues that the lag further destabilizes firms already struggling to recover from pandemic-induced financial setbacks. The law firm has appealed to the federal court to expedite the processing of their ERC claim. More details on this legal proceeding can be accessed through the court docket.
With the ongoing delays and the IRS’s focus on fraud prevention, it remains to be seen how swiftly these claims will be processed, and businesses will receive their due credits.