IRS: Understanding your CP320B notice

Summary

An IRS web page titled Understanding your CP320B notice, on the 2-year period to file suit after a disallowance letter such as Letter 105-C. It states that requesting an appeal does not extend the 2-year period and that Form 907, Agreement to Extend the Time to Bring Suit, extends it when signed by both parties before the period expires. It tells taxpayers who responded to an Employee Retention Credit disallowance and have less than 6 months remaining that they may request an extension, and it lists steps for downloading, completing and uploading Form 907. It also lists fields that commonly delay review and answers questions on who can sign Form 907.

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Full text

Understanding your CP320B notice

What this notice is about

You generally have two years from the date of the disallowance letter (for example, Letter 105-C) to file suit. Requesting an appeal does not extend this 2-year period.

If you do not file suit within the 2-year period, or do not enter into a written extension agreement before it expires the IRS cannot issue a refund or credit, even if Appeals later issues a favorable decision.

Form 907, Agreement to Extend the Time to Bring Suit PDF , is a written agreement between a taxpayer and the Internal Revenue Service that extends the 2-year period for filing suit to seek a refund or credit after a claim disallowance. The agreement must be signed by both parties before the 2-year period expires .

An executed agreement extends the time to file suit and will allow the IRS additional time to consider your claim disallowance and, if warranted, issue a refund or apply a credit.

What you need to do

If you responded to a disallowance notice for your Employee Retention Credit and are awaiting a reply, and there are less than 6 months remaining in the 2-year period to file suit, you may request an extension of time to file suit using this process.

You can protect your rights to bring suit or receive your refund or credit (if determined eligible) by following the steps detailed below:

To request an extension:

- Download Form 907, Agreement to Extend the Time to Bring Suit PDF
- Complete the entire form and sign it.
- Submit your documents using the Document Upload Tool
- Wait for the IRS to review and return a countersigned copy of the agreement. The extension is not valid until the IRS signs it .

If the 2-year deadline is quickly approaching, contact the phone number listed on your latest notice immediately.

You may want to

To protect your right to pursue a refund, you must sign Form 907 with the IRS to extend the time to file suit, or file suit with the U.S. District Court that has jurisdiction or with the U.S. Court of Federal Claims before the 2-year period expires.

Common Issues delaying Form 907 review and approval

Failing to complete all required fields on Form 907 can result in a delay in processing or denial of extension agreement.

Ensure to fill out all required fields including:

- Taxpayer ID Number
- Taxpayer Name
- Address
- Expiration Date: May be up to 2 years from date of earliest expiration

Refund Credit Information

- Period Ended: Last day of the impacted quarter (e.g. 03/31/2021)
- Kind of Tax: Employment
- Amount of Tax: Amount of Refund Claim
- Date Notice of Disallowance Mailed or Waiver Files : Date on LTR105C or LTR106C

Ensure all appropriate signatures are included with the date signed. See FAQs for additional signature information.

Frequently asked questions

Who can sign Form 907?

If this agreement is for any year(s) you filed a joint return, both husband and wife must sign the original and copy of this form unless one, acting under a power of attorney, signs as agent for the other. The signatures must match the names as they appear on this form.

If you are an attorney or agent of the taxpayer(s), you may sign this agreement provided the action is specifically authorized by a power of attorney. You must include a copy of your Form 2848, Power of Attorney and Declaration of Representative with Line 5a completed to authorize signing of Form 907.

If you are acting as a fiduciary (such as executor, administrator, trustee, etc.) and you sign this agreement, also attach a completed Form 56, Notice Concerning Fiduciary Relationship, if you haven't already filed one.

If the taxpayer is a corporation, sign this agreement with the corporate name followed by the signature and title of the officer(s) authorized to sign.

Where do I find the date of my ERC disallowance?

The date of your ERC disallowance will be included on the disallowance letter (i.e., Letter 105-C or 106-C) you received from the IRS in response to your claim. The date is generally in the top right corner of the letter.

Helpful information

Understanding Letter 105-C, Disallowance of the Employee Retention Credit (ERC)

If you receive Letter 106-C about the Employee Retention Credit

Form 907, Agreement to Extend the Time to Bring Suit PDF

Need help?

- You can authorize someone to represent you before the IRS or inspect and/or receive confidential tax information.
- You may be eligible for free help from the Taxpayer Advocate Service (TAS) .
- You may qualify for help from a Low Income Taxpayer Clinic .
- If you didn’t receive a letter or notice, use Let us help you .

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