Week after week, ERC processing is beginning to feel a bit like Groundhog Day...
Processing activity continues, but the story barely changes. Refunds are still being issued, audits are still technically active, and the occasional denial still appears. Yet the overall pace remains consistently lackluster. The program is still clearly not frozen, but it is operating at a level that feels far removed from any meaningful effort to resolve the remaining backlog.
What changed this week was not the volume of refunds; It was how old they were.
The average age of a refunded claim this week jumped to 851 days from filing to refund, far exceeding the previous high of 691 days observed in our dataset. Put differently, the average claim being paid this week was filed approximately 2.33 years ago.
That raises interesting questions: Is the IRS revisiting extremely old inventory that may have been sitting unresolved for years? Or are these simply cases that fell through the cracks and are only now resurfacing?
Either way, it suggests that at least part of the current refund activity may be tied to very old inventory finally being cleared, rather than any systematic acceleration of “general” ERC processing.
The IRS processed 56 refunds totaling $11.5M this week, a slight decrease from last week’s totals. Average claim size also declined modestly, while the most notable shift was the dramatic increase in the age of claims being paid.
Meanwhile, enforcement activity appears to have cooled once again. We observed only one denial this week and very limited net growth in audit codes during February.
However, practitioners continue reporting a steady stream of Letters 6612 & Information Document Requests (IDRs) tied to audits initiated over the past six months. In other words, the IRS appears to be working on existing examinations, but not meaningfully expanding enforcement activity at the moment. Don’t go out and buy your ERC audit protection plans just yet! ;)
Total refunds: 56, down from 61 last week
Total dollar volume: $11.5M, down from $14.09M
Average refund: $205,519, down from $230,933
Average days from filing to refund: 851 days, up from 563 days!
Denials: 1, down from 12
Audits: 106 total in February, up slightly from 104 last week (net increase of 2 new audit codes)
Audit activity continues to look more like working the backlog than expansion.
February’s audit total increased only slightly to 106 codes, reflecting a net increase of just two additional audit codes since last week. That suggests the IRS is not meaningfully broadening the population of taxpayers under examination right now.
At the same time, many practitioners report receiving IDRs tied to audits initiated during the summer and fall of 2025. Those examinations appear to be progressing slowly through the normal audit process, even while new enforcement actions remain limited.
In short, the IRS appears to be working through existing audits without significantly expanding enforcement activity.
On a related note, positive or negative resolutions to both audits are virtually non-existent, despite the IRS having many IDR responses for over six (6) months now.
Denials dropped sharply this week, with just one denial observed.
As the backlog of 2025 IDRs continues moving through the examination pipeline, additional denials may begin to surface again in the coming weeks or months. Stay tuned.
ERC processing continues, but increasingly feels like it is stuck in place, inching forward without a clearly communicated plan for how or when it will finally wind down.
Signing off,
Kenny Dettman, CPA
Disclaimer: *𝘋𝘢𝘵𝘢 𝘴𝘦𝘵 𝘪𝘴 𝘧𝘳𝘰𝘮 𝘢𝘱𝘱𝘳𝘰𝘹𝘪𝘮𝘢𝘵𝘦𝘭𝘺 15,000 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴𝘦𝘴 𝘵𝘳𝘢𝘤𝘬𝘪𝘯𝘨 𝘌𝘙𝘊*
