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What if the IRS already resolved your ERC claim, and just never told you? Over the weekend, TaxNow’s transcript monitoring data surfaced something important.
It appears the IRS has now substantially processed most ERC claims that were not in a “special situations” category.
“Special situations” is our term, not the IRS’s, but it’s the easiest way to describe the buckets where remaining claims appear to live.
Those situations include claims that are:
In other words, the ERC “backlog” may largely be gone, but that does not mean every taxpayer received a refund.
Recently, the IRS suggested that somewhere between 0 and 29,000 ERC claims remained pending.
Meanwhile, practitioner groups like the HIRE Coalition have estimated that hundreds of thousands of claims were still outstanding.
Both statements cannot simultaneously be true. “The February 2026 GAO report and last week’s testimony from the IRS CEO suggest all ERC claims are closed or in compliance. However, the numbers reported by TAS and a recent survey by the HIRE Coalition suggest another story,” said Tim Parrish, President of HIRE Coalition.
One possible explanation is that a large number of claims were resolved internally without taxpayers fully realizing it yet.
That resolution may include disallowance decisions that are not immediately obvious unless you review the IRS account transcript carefully.
ERC claims generally fall into one of several transcript patterns.
Understanding these patterns can reveal what actually happened to your claim.
Claims under audit typically show:
Transaction Codes
These often appear together.
For some taxpayers, this has already triggered:
Others may see the exam codes but have not received correspondence yet.
That can happen.
Mail gets lost more often than practitioners would like to admit.
If you fall into this category, it may be worth:
Formal denials are the most straightforward category.
These usually involve:
Transcript signals
These are Notices of Claim Disallowance.
Once issued, they start the two-year statute to challenge the denial in federal court.
If you receive one of these letters and disagree with the IRS determination, it is important to follow the instructions for administrative appeal or litigation.
Victoria Beck, General Counsel for Sagemont Advisors, warns, “As more ERC claims move into examination or are formally disallowed, the central issue for many businesses is shifting from waiting for their refund to how best to respond to the IRS’s determination. That process typically requires a disciplined approach to developing the administrative record, evaluating appellate options within the IRS, and, where appropriate, preserving the ability to challenge the denial in court.”
Another common scenario is a claim that appears approved but not paid.
These transcripts typically show:
In plain English:
The credit was allowed, but the refund has not been released.
Refunds can be held for several administrative reasons:
If the refund has been sitting in this state for 45 days or longer, taxpayers often have success by:
The good news here is that the credit was initially approved.
The remaining challenge is simply clearing the administrative hold.
If your transcript shows “TC 846 – Refund issued”, but the check never arrived, the likely issue is simply a lost or stolen check.
In those cases, the IRS recommends filing Form 3911 to initiate a refund trace.
This form can be faxed.
The final category is the most confusing.
These are claims where transcripts strongly suggest the claim was resolved against the taxpayer, even though the taxpayer may not yet realize it.
Common indicators include:
A. TC 290 adjustments
Even if a formal disallowance letter has not yet been received, a 290 adjustment associated with the ERC period can signal that the claim has already been resolved.
B. Prior ERC processing on an earlier filing
If the transcript shows:
The presence of these codes can indicate that ERC was already processed on an original return or earlier amended return, and a later amendment did not generate an additional credit.
C. Multiple amended returns
Repeated 971 / 976 entries may indicate multiple amended returns were filed.
In those situations, the IRS may process the earliest valid claim and ignore subsequent filings without formally denying the later-filed amended return. This is particularly common when the amended returns were filed within close proximity of one another.
D. Missing original return indicators
If the transcript does not show:
TC 150 – original return filed
The IRS may not have had a valid base return to process the ERC claim against.
E. Statute issues
Certain claims may also run into statute limitations.
Notably, legislation enacted in 2025 prevents the IRS from allowing ERC refunds for Q3 or Q4 2021 claims filed after January 31, 2024, even if the claim would otherwise have been timely.
The ERC story is entering a new phase. For the last two years, the conversation centered on the backlog. Now the real challenge is understanding what actually happened to millions of claims.
For most taxpayers, the answer will fall into one of five categories:
But if your refund never arrived, the most important thing you can do is review your IRS transcripts. They often tell the story long before the IRS does.
If you believe your ERC claim may fall into one of these categories, I’m happy to take a look.
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