IRS announces new process for extending time to review disallowed ERC claims
Taxpayers now have a new way to request more time to resolve claims administratively or file a refund suit.
The IRS today announced a new, streamlined process for taxpayers to extend the period for the IRS and the IRS Independent Office of Appeals to review a taxpayer’s response to a disallowance of an employee retention credit (ERC) claim to avoid refund litigation.
When an ERC claim is disallowed, taxpayers receive a Letter 105-C or 106-C and generally have two years from the date of the letter to resolve their claim administratively or file a refund suit. Protesting the disallowance with the IRS Independent Office of Appeals does not extend this two-year deadline. After this two-year period ends, the IRS cannot issue a refund, even if it later decides in the taxpayer’s favor.
To provide more time for claim resolution, the IRS has introduced a new method for certain taxpayers to request an extension by filing Form 907, Agreement to Extend the Time to Bring Suit. This option is available to taxpayers who meet both of the following conditions:
- They are waiting for the IRS to consider their response to the notice of disallowance on Letter 105-C or 106-C.
- They have six months or less remaining before their two-year period expires.
Eligible taxpayers can submit Form 907 through the IRS Document Upload Tool. The IRS is also sending Notice CP320B to taxpayers identified as eligible for this new submission method. However, taxpayers who believe they are eligible but do not receive a notice can still use the new process.
Read the IRS release—IR-2026-58 (April 27, 2026)