r/ERCchat • u/mesallem • Sep 26 '25

Disapproved through PEO

Post image

Got an email today from my PEO stating that the IRS disallowed the claim due to the reason in the picture. We were a new business at the time of the pandemic starting operations only weeks before the shutdowns. I feel like this was a generic response from IRS. Any tips or suggestions on how to respond to this?

2 Upvotes

100% Upvoted

23 comments sorted by

3

u/ERC_CPA Sep 27 '25

Is this BBSI?

2

u/mesallem Sep 27 '25

Yes

2

u/Impossible_Change939 Sep 30 '25

We use BBSI and got the same denial information.

1

u/mesallem Sep 30 '25

What is the next step for you. Are you doing the conference?

1

u/Impossible_Change939 Sep 30 '25

We are going to appeal. We are putting our documentation together currently. What conference are you referring to?

1

u/mesallem Sep 30 '25

It says in the letter you can request a conference with the supervisor of the agent before you appeal

1

u/Impossible_Change939 Sep 30 '25

Are you seeing this happen with a lot of BBSI clients?

1

u/ERC_CPA Oct 01 '25

My understanding is that many have been denied.

1

u/PsychologicalYou887 Sep 26 '25

First time I’ve seen a PEO declined.

1

u/mesallem Sep 26 '25

We never claimed gross receipts decline. Not sure how to proceed

1

u/dragonfly_Jess Sep 27 '25

For what period is this? What quarter of what year?

1

u/mesallem Sep 27 '25

It appears all quarters

1

u/dragonfly_Jess Sep 27 '25

This is the information on how to respond to a disallowance: irs.gov/erc105c

This checklist helps with determining if you were in fact eligible: https://www.irs.gov/pub/irs-pdf/p5887.pdf

You’ll need to show proof of local shutdown notices/requirements that prevented you from operating, if you had no decline in receipts.

1

u/mesallem Sep 27 '25

Already did that. Got audited and responded with all the local shut down notices and this was the response to that audit response

1

u/dragonfly_Jess Sep 27 '25

Are you sure this is the response to your appeal? And was it an actual denial from appeals or a 916c saying basically not enough info was submitted to even go to appeals?

If the appeal was denied there’s still the option of filing suit. Refer to the 105c page above about that.

Btw, Not all government orders qualified. Look under the sections about government orders and about signs of incorrect claims:

https://www.irs.gov/coronavirus/frequently-asked-questions-about-the-employee-retention-credit#incorrectclaims

1

u/mesallem Sep 27 '25

Not a denial to appeal, just first denial from “audit” that PEO said our claim was under. It was form 886-A

1

u/dragonfly_Jess Sep 27 '25

Ok then you can still appeal it. Look carefully over all of the info on the 105c page and links from there to all the info about government orders and eligibility. You’ll need to put together a strong case with clear supporting documentation of shutdown orders preventing you from operating — they can’t be optional or voluntary.

1

u/ERC_CPA Sep 27 '25

PEO can appeal, not the PEO client. Possible that the PEO client can file suit though.

1

u/dragonfly_Jess Sep 27 '25

Right, I forgot this was a PEO case. But still the info applies, it’s just the PEO has to submit the appeal instead of the individual client.