ERC Claim Under Review? Build the Proof Without an Internal IRS Audit Checklist

An ERC claim under review needs evidence supporting the credit actually claimed. An internal IRS audit template is not a substitute for that file. Start with the claimed quarter, the qualifying basis, the wage calculation and the primary business records supporting each step. A promoter’s conclusion that a business qualified does not supply the missing records.

Public eligibility rules and internal examination methods are different

In Levin v. IRS, No. 5:24-cv-00582-HNJ (N.D. Ala. Jan. 14, 2026), pages 29–34, the court upheld withholding of particular internal ERC examination materials. It distinguished public information explaining the credit from internal questioning methods, triggers and investigative priorities. The opinion did not determine any employer’s ERC eligibility.

The court specifically noted that public guidance was available for substantiation. That does not make every FOIA request pointless or every IRS withholding proper. It means a pending request for internal material should not be treated as the necessary first step before assembling evidence of your own claim.

Identify the period and qualification theory first

The IRS’s public ERC guidance distinguishes rules by the period when wages were paid. A suspension-based claim, a gross-receipts claim and a recovery-startup claim require different analysis. Do not treat a later-quarter rule or another business’s result as proof of your eligibility.

Notice 2021-20, section III.N, Question 70 identifies substantiation records for the 2020 credit it addresses. Later periods require their applicable guidance as well. Begin the file with the quarter and precise legal basis so a reviewer can tell which rules and facts you relied on. This article concerns substantiation of an existing claim, not an invitation to assume a new claim can still be filed.

Connect each claimed fact to a document

These categories follow the work Question 70 asks the employer to document. They are not a finding that a particular set of records establishes eligibility. A copy of an order may show a restriction existed without establishing its effect on this business; payroll totals may show wages paid without establishing that every dollar was a qualified wage.

Test the connection rather than collecting a large undirected bundle

For a practical example, suppose a restaurant’s claim relies on a government restriction. Put the order beside the dates and operations affected, then identify the records supporting the claimed effect. If some locations or operations were treated differently, make those differences visible. A generic narrative about difficult pandemic conditions does not explain the application of the rule to each claimed period.

For a gross-receipts theory, preserve the underlying records and the actual calculation, including the treatment of related entities where relevant. Mark unexplained adjustments rather than assuming a final spreadsheet total is self-proving. For the wage calculation, reconcile the claimed amounts to payroll and explain allocations and exclusions.

The IRS guidance also warns against double use of wages for PPP forgiveness and the ERC. Preserve the forgiveness and wage-allocation records so the claimed calculation can be checked. Do not confuse receiving PPP proceeds with a categorical inability to claim any ERC; the question includes which wages were used and the applicable rules.

Respond to the actual IRS communication

An information request, examination proposal and disallowance notice do different jobs. Keep every page, identify what is requested or decided and flag the stated response date. If records are missing or the request needs clarification, address that promptly through the appropriate process. Do not assume a separate FOIA request changes the deadline or preserves a response to an ERC disallowance.

If a claim has been disallowed, review the notice and available response or review routes separately. Our Levin analysis concerns disclosure of internal agency records, not the prerequisites for a refund suit or a rule that an employer must accept a disallowance.

Prepare a file another reviewer can follow

Bring the filed claim and calculation, eligibility analysis, supporting orders or receipts, payroll and health-plan records, aggregation information, relevant PPP documentation and current IRS letters. Identify which parts were prepared by a promoter or payroll provider and which primary records you possess. The useful question is whether the evidence supports the particular credit claimed—not whether another business received money or an internal IRS questionnaire can be obtained.