At first glance, this week’s ERC data looks stable.
Refund counts held steady, albeit much lower than historical averages. Processing activity still appears to have a pulse.
But underneath the surface, the story is very different.
The latest week in processing reinforces the idea that the IRS continues to work a selective backlog of “special situations,” where the size and type of claims being processed matters more than the volume itself.
This week, TaxNow tracked 115 refunds totaling $7.76M, with an average refund of just $67,252 (down from $136,797 in the prior week).
On the surface, refund counts are consistent with last week, but the real story is in the size of those refunds:
What remains appears to be smaller claims, edge cases, and administrative resolutions.
Here’s how this week compares to last week:
Total Refunds: 115 vs. 101 (+14 / +14%)
Total Dollar Volume: $7.76M vs. $13.81M ( -44%)
Average Refund: $67,252 vs. $138,797 ( -51%)
Denials: 13 vs. 21 (-8)
Audits: 0 vs. 0 last week (Only 6 total in March)
We continue to see 105C denials being overturned and converted into refunds, particularly in:
Notably, some partial suspension claims are cleared, before even reaching Appeals, which is a meaningful shift.
However, a new pattern is emerging.
Many of these approvals are tied to very small dollar claims.
At the same time, we continue to hear stories of:
…result in negative outcomes in Appeals.
The inconsistency is becoming harder to ignore. Claims that might appear more aggressive on paper are passing, while larger, more conservative claims are failing, often later in the process.
Whether intentional or not, the outcome raises a real concern:
Size should not determine outcome. But increasingly, it appears to.
We are also continuing to see resolution of prior “special situation” claims, including lost checks being reissued and previously “stuck” refunds being released.
They remain an important contributor to current refund activity and reflect continued cleanup within the system.
There were no new audits initiated this week, but the broader trend remains intact.
Once again, we continue to see a small population of correspondence audits closing out with zero ERC allowed, reinforcing the challenges taxpayers are facing once claims enter the formal exam process.
There was a meaningful development on the PEO front this week.
The National Association of Professional Employer Organizations (NAPEO) recently met with the IRS to discuss ongoing ERC delays.
The IRS reported:
The expectation is that processing activity will accelerate in the coming weeks.
While we are unlikely to see this reflected in the data, this is one of the more positive updates we’ve received on PEO claims to date.
IRS CEO Frank Bisignano is scheduled to testify before the Senate Finance Committee on April 15, 2026.
As with prior hearings, this presents an opportunity for lawmakers to press on ERC-related issues, including delays, denials, and administrative consistency.
For those looking to get involved, the HIRE Coalition continues to coordinate outreach efforts. Interested parties can connect with Tim Parrish to help elevate ERC concerns with Senate offices.
This week continues to signal a marked shift beyond “normal processing.” Refund counts remain steady, but the sharp decline in average refund size makes clear that the IRS has moved beyond the core backlog and into a far more selective phase of processing. At the same time, the growing inconsistency in outcomes is becoming harder to ignore.
Smaller claims, including some that would appear more aggressive, are finding paths to approval, while more traditional claims continue to face denials in Appeals and exams. As the ERC program moves into its seventh year of existence, the focus is no longer on when claims will be processed, but how…and why…certain claims are being allowed while others with equal or worse fact patterns underlying eligibility are not.
Disclaimer: *𝘋𝘢𝘵𝘢 𝘴𝘦𝘵 𝘪𝘴 𝘧𝘳𝘰𝘮 𝘢𝘱𝘱𝘳𝘰𝘹𝘪𝘮𝘢𝘵𝘦𝘭𝘺 15,000 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴𝘦𝘴 𝘵𝘳𝘢𝘤𝘬𝘪𝘯𝘨 𝘌𝘙𝘊*
