IRS Updates FAQs on Employee Retention Credit (ERC) Claims Under the “One, Big, Beautiful Bill”

The Internal Revenue Service (IRS) has released new Frequently Asked Questions (FAQs) in Fact Sheet 2025-07 to help taxpayers understand the limitations on Employee Retention Credit (ERC) claims filed after January 31, 2024, for the third and fourth quarters of 2021.

These limits were established under the One, Big, Beautiful Bill, legislation aimed at tightening ERC compliance and preventing improper or late claims.

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What the New ERC FAQs Cover

The IRS FAQs explain:

• When an ERC claim is considered timely filed

• How the credit and refund limitation applies

• What appeal options are available if a claim is denied

In short, if you filed an ERC claim after Jan. 31, 2024, your ability to receive credits or refunds may now be restricted.

What You Can Rely On: Official IRS Guidance

The IRS emphasized that FAQs are helpful but not legally binding.

Only official guidance published in the Internal Revenue Bulletin (IRB) can be fully relied upon as precedent.

The Internal Revenue Bulletin is the IRS’s official source for:

• Rulings and procedures that ensure uniform application of tax laws

• Treasury decisions, executive orders, and legislation

• Court decisions and other official tax-related materials

Rulings published in the Bulletin are considered authoritative and may be cited as precedent.

However, IRS personnel and taxpayers must consider new laws or court rulings that might change earlier guidance.

FAQs: Useful, But Non-Binding

The IRS uses FAQs to quickly communicate answers to common tax questions.
However:

• FAQs do not carry the same legal authority as published guidance.

• They can’t be cited as precedent in other cases.

• If an FAQ contains an error, the law, not the FAQ, controls your tax liability.

Still, the IRS notes that reasonable reliance on an FAQ may protect taxpayers from certain penalties, such as:

• Negligence penalties

• Accuracy-related penalties

If you relied in good faith on an IRS FAQ that later changed or proved inaccurate, the IRS will consider that when evaluating penalties.

What About Informal Guidance?

Other informal resources such as IRS forms, instructions, publications, and IRS.gov webpages — work much like FAQs. They’re useful for quick answers, but:

• They’re not binding authority.

• They shouldn’t be cited as legal precedent.

• If incorrect, the actual law determines your tax outcome.

Still, taxpayers who reasonably rely on these materials may also be protected from penalties if they can show good-faith reliance and reasonable cause.

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