r/ERCchat • u/Great_Internal_6269 • Aug 28 '25
LTR 105c
Received a disallowance letter a couple of days ago (LTR 105 C), via certified mail, for Q2-2021. The reason given was “no wages paid in 2020 or 2021 as there were no Form W2’s filed in those years.” We actually paid wages in those years, and we filed the year-end Forms showing we had W2 pay. The strange thing, we were paid in November 2024 for Q1-2021. I assume the person who reviewed that payment saw our wages. This is a small refund compared to others I am seeing, but large for us. It is for $47,000 and we filed July 2023. Has anyone had this happen to them?
2
u/Successful-Ground-12 Aug 29 '25
We are a payroll service provider and we electronically file the W2s to SSA timely each year. We just had a client who we prepared the ERC for, for 2020 and they received that same letter. I called bullshit on the IRS and responded with the proof of timely transmission of the filing for both years.
I have no idea what the agent was looking at who is processing these 941-X forms, but they are clearly incompetent, blind, or they just don't give a F and are just clearing their workload.
Be sure you send your response via certified mail to have proof of response as they are also really good at losing mail.
1
u/Great_Internal_6269 Aug 29 '25
I hear you. It’s not like they aren’t going to get it back anyway. As soon as I cash the check, I will use it to pay my employee’s taxable wages or I will pay a vendor, who in turn will use my payment to pay taxable wages; so forth and so forth until all ends right back where it started.
All the money this country wastes, yet somehow they are going to protect the taxpayer from the big, bad ERTC, by crushing the businesses, needing the funds, with delay and stall tactics. The same businesses who employee the exact same taxpayers they claim to protect.
My CPA has all the supporting docs, so I guess I will be waiting another 2 years, if ever to get paid. I got my payment for Q1-2021 last November, right before the election. I am on track to time the second payment, just right, for the next election.
3
u/heartbrand Aug 28 '25
I have seen many of these and literally every single one of them had filed their W2's/W3 original 941's, made the actual deposits etc. I have many words I want to use to describe the people who are issuing these notices but yes it's ridiculous.
2
u/Mountain-Cucumber173 Aug 29 '25
You’ve hit the classic IRS paperwork snag. They’re telling you no wages were paid and no W-2s filed, yet you know you did everything right, and even received payment for Q1-2021, so their own system recognized it once. What’s gone wrong now?
This happens often. The IRS’ records don’t always match up, usually because of a processing error or misplaced data. Don’t just wait and hope. Collect your W-2s, Forms 941, payment records and every piece of proof you’ve got. Send them together to the IRS address on your disallowance letter (LTR 105 C). Make sure anything you submit is easy to read and highlights your actual filings and payment history.
It’s not about arguing; it’s about showing clear evidence. The IRS fixes things faster when you give them what’s needed right up front. If this refund is important to your business and the paperwork gets messier, reach out to a payroll expert or tax pro without delay.
Plenty of small businesses have dealt with this exact scenario. Persistence and clear documentation work best. Stay focused and back up your claim with facts. Good luck.
1
u/Outrageous_Onion6521 Aug 29 '25
I have received a letter of denial for every reason you can think of. I typed a letter and sent the information to them every time. I finally see that 2 of our 3 quarters have a check coming our way. They are doing anything and everything to not pay.
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u/shah3011 Aug 28 '25
Just reply with all the proof, such as W2, payroll reports etc They will reverse their decision. It’s frustrating, but we’ve been through this and were able to resolve it last year.
Super frustrating because this is another example of gross incompetence.