future-focused

Streamlined Extension Process Now Available for Employers Facing ERC Claim Disallowance Deadlines

2 minute read

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On April 27th, the IRS announced a method for certain taxpayers to request  additional time to pursue an administrative appeal when the IRS has disallowed its COVID-era Employee Retention Credit (ERC) claim before they must file suit.  (IR-2026-58).

When the IRS disallows an ERC claim, it issues Letter 105‑C or 106‑C, triggering a two‑year period for the taxpayer to either resolve the issue administratively or file a refund suit in federal court. However, filing an appeal of the disallowance with the IRS Independent Office of Appeals does not suspend or extend this statutory deadline.

Employers that have six months or less remaining to file suit, and whose ERC claims remain under IRS review,  may now submit a Form 907, “Agreement to Extend the Time to Bring Suit,”  through the IRS’s  new online tool at IRS.gov/DUTReply by selecting notice CP320B from the drop-down menu. The process allows taxpayers to avoid losing refund rights while their ERC claims remain under review. The IRS will notify taxpayers in writing whether it agrees to the extension and will return countersigned forms when approved.

The IRS is issuing Notice CP320B to taxpayers it has identified as eligible, but employers may still qualify even if they do not receive the notice. More detailed instructions are available at IRS.gov/erc105c and IRS.gov/erc106c.

A properly executed Form 907, signed by both the taxpayer and the IRS before the deadline, extends the time for the IRS to complete its review and preserves the employer’s right to file suit if necessary.

Employers with disallowed ERC claims should pay attention to the date on their IRS Letter 105‑C or 106‑C. Once the two‑year period expires without a suit having been filed, the IRS cannot issue a refund, making timely action critical  to preserve the ability to recover refunds of ERC claims that are ultimately approved by the IRS.

The IRS said it will continue processing ERC claims and appeals under established procedures, adding that the new streamlined process is intended to provide taxpayers with timely information about their rights and available options.

In a blog post, National Taxpayer Advocate Erin Collins stated that “This new streamlined process for ERC claims is a step in the right direction toward protecting taxpayer rights, but it highlighted a broader issue.”  Collins went on to state that “The two-year deadline under IRC section 6532(a) is unforgiving, and too many taxpayers, practitioners, and IRS employees are unaware of its consequences until it is too late.”

For more information about this update, contact Liskow attorneys Caroline Lafourcade, Leon Ritteneberg, III and Kevin Naccari, and visit Liskow’s Tax Practice page. 

Employers that have six months or less remaining on their statute of limitations to file suit and are still waiting for the IRS to consider their response to a disallowance letter may now submit a Form 907, “Agreement to Extend the Time to Bring Suit,” to the IRS through a new online tool, to avoid losing refund rights while their ERC claims remain under review.

Constitutional Challenge to the FMC

3 minute read

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Since the 2020-2022 supply chain congestion, ocean carriers have faced a wave of Shipping Act claims from customers seeking to recover elevated import costs incurred during the pandemic-driven surge in U.S. consumer demand. Broadly speaking, these complaints have been brought by multinational big-box chains seeking to recover some of the steep costs they incurred to import their goods during the pandemic era’s unprecedented surge in U.S. consumer demand. A handful of these claims have progressed to initial adjudication before the Federal Maritime Commission (FMC), resulting in administrative decisions with sizable damage awards against the carrier. This week, for the first time, an ocean carrier has taken square aim at the source of those decisions: the Federal Maritime Commission itself. 

On May 5, 2026, Orient Overseas Container Line Limited and its Europe and USA affiliates (collectively, OOCL) filed suit in a Texas federal court seeking a temporary restraining order and injunction against enforcement of an April 24, 2026 FMC ruling. In that ruling, Chief Administrative Law Judge (ALJ) Erin Wirth (also named as a defendant in OOCL’s new Texas lawsuit) found OOCL liable under the Shipping Act (46 U.S.C. 41102) for unreasonable practices involving service commitments, failure to perform its services in accordance with service contracts, refusal to deal, and retaliation against the complainant Bed, Bath & Beyond. In the initial decision, ALJ Wirth awarded approximately $45.6 million in reparations. 

In the May 2026 federal complaint, OOCL advances both jurisdictional and constitutional arguments. First, it frames the FMC ruling as deciding contractual disputes rather than statutory violations.  OOCL argues the FMC lacked jurisdiction to adjudicate claims regarding service and space allocation, price terms, or the reasonableness of OOCL’s demurrage and detention charges because those are breach-of-contract claims relating to the service contracts between ocean carriers and their customers. OOCL contends that the Shipping Act gives the FMC jurisdiction over statutory violations, but it does not extend jurisdiction to contract enforcement.

Second, OOCL asserts that all  FMC proceedings are unconstitutional to the extent they involve ‘executive’ function (i.e., enforcement of the Shipping Act in the form of civil reparations) rather than ‘administrative’ functions.  OOCL contends that because the FMC ALJs are insulated by two ‘for-cause’ removal layers, they are impermissibly restricted from presidential oversight. Specifically, an FMC ALJ can only be removed for good cause by the Merit Systems Protection Board (MSPB), and, in turn, the MSPB members themselves can only be removed for cause. OOCL argues that this violates Article II of the constitution by restricting presidential oversight over executive branch officers. 

While there is a circuit split, this argument has been successful in obtaining preliminary injunctions against ALJ rulings from the National Labor Review Board, the Securities and Exchange Commission, and Department of Labor in the Fifth Circuit. OOCL also contends that this constitutional argument is supported by the current Department of Justice. A 2025 memorandum from the DOJ explains, “the Department of Justice has concluded that the multiple layers of removal restrictions for … ALJs … violate the Constitution, [and] the Department will no longer defend them in court[.]” If the court adopts OOCL’s arguments, the FMC’s scope and power could be curtailed.

The lawsuit is a big swing, and a consequential one. If successful, OOCL’s challenge would impact roughly a dozen proceedings currently pending before the FMC, with claims totaling billions of dollars at stake.  Attacking the FMC and its individual ALJs is its own risk. To borrow a phrase: 

“You come at the king, you best not miss.” Omar Little, The Wire.

For more information, please contact Liskow attorneys Emily von Qualen, Chelsea Crews, and Ray Waid, and visit Liskow’s Maritime Litigation & Casualty Response and Maritime Transactions practice pages.

IRS Resumes Significant-Issue Rulings for Corporate Reorganizations and Spin-Offs

2 minute read

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The IRS announced that it will once again issue private letter rulings on “significant issues” arising in corporate reorganizations and spin-offs, reversing a 2024 policy that had curtailed such rulings. Under Revenue Procedure 2026-21, taxpayers may now request rulings on discrete legal issues within a transaction, rather than seeking a ruling on the entire structure.

This change follows the IRS’s withdrawal of proposed spin-off regulations in September 2025 and reflects a broader shift toward restoring taxpayer access to advance guidance. IRS officials have since encouraged taxpayers to utilize the ruling process, particularly in complex Section 355 spin-offs and Section 368 reorganizations.

Rev. Proc. 2026-21 permits taxpayers to request rulings on specific, “germane and discrete” issues arising in corporate transactions, provided those issues fall solely within the jurisdiction of the IRS Office of Associate Chief Counsel (Corporate). The guidance emphasizes that ruling requests must be narrowly tailored and directly relevant to the transaction, rather than broad or hypothetical in nature.

The revenue procedure does not guarantee that the IRS will issue a ruling in every case. Instead, it restores the IRS’s discretion to consider targeted ruling requests, subject to existing procedural requirements such as full disclosure, required representations, and user fees. The IRS also retains the ability to decline rulings on issues that are overly factual, uncertain, or otherwise inappropriate for advance guidance.

The reinstatement of significant-issue rulings provides taxpayers with a renewed opportunity to obtain targeted tax certainty in high-stakes corporate transactions, particularly where a single legal issue may determine overall tax treatment. For more information about this update, contact Liskow attorneys Leon Rittenberg III, Caroline Lafourcade, and Kevin Naccari, and visit Liskow’s Tax Practice page. 

Changes Are Ablaze: China’s Revised Maritime Code Reshapes Fire Liability for Carriers

2 minute read

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On May 1, 2026, the People’s Republic of China (“PRC”) implemented the most extensive revision of its Maritime Code since the Code’s enactment in 1993. For anyone trading to, from, or within China, the revisions will impact liability, dispute resolution, and more—especially for cargo carriers and claims.  

Under the prior code, Article 51(2) provided that an international carrier was exempt from liability regardless of whether the fire accident occurred at sea or on land as long as the fire accident leading to the cargo loss or damage occurred within the carrier’s period of responsibility and was not the actual fault of the carrier.  

Under the new code, shore-side terminal and warehouse fires during the carrier’s period of responsibility are no longer exempt. So, the fire exemption is now limited to on-board fires.

It is important to note that the new code creates consistency between international carriage and domestic carriage—port-to-port voyages within China (the Code remains inapplicable to transport in rivers, lakes, and other similar inland waters)—whereas the prior code applied only to international voyages. Although the code now extends to domestic carriage to create consistency, domestic carriage is excluded from being able to rely on the fire exemption. 

The differing seaworthiness obligations contained in Article 48 of the new code likely explain the domestic carriage exclusion. For international voyages, a vessel must be seaworthy before and at the commencement of a voyage, yet for domestic carriage, the carrier shall exercise due diligence for the vessel to be seaworthy throughout the entire voyage. This would create a conflict of clauses if a vessel engaged in domestic carriage, required to be seaworthy for an entire voyage, claims the fire exemption for damage that was caused by unseaworthiness.

In sum, the code revision limits the fire exemption clause to international voyages—where the port of loading or discharge is located within a PRC territory—for damage caused by fire on board the vessel. In the age of lithium-ion batteries and incorrectly disclosed cargo, this revision could have significant effects on an international carrier’s exposure.

For more information or questions on how this revision may impact you or your company’s operations, contact Liskow attorney Elizabeth Strunk and visit Liskow’s Maritime Litigation & Casualty Response practice page.

Rolling the Dice on Reporting: Treasury Proposes Higher Thresholds and New Limits on Wagering Losses

2 minute read

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The U.S. Department of the Treasury issued proposed regulations addressing two changes affecting the gaming industry and taxpayers: (i) an increase in the information reporting threshold for certain payees, including gambling winnings, and (ii) the implementation and clarification of new statutory limits on wagering loss deductions. The proposed rules reflect recent legislative changes enacted as part of the One Big Beautiful Bill Act.

Included in the proposed regulations is the adjustment of reporting thresholds for certain information returns, including Form W-2G (Certain Gambling Winnings). Beginning in 2026, the threshold for reporting certain gambling winnings is increased to $2,000, with future adjustments indexed for inflation. This represents a substantial increase from long-standing thresholds, and is intended to reduce administrative burdens on payors while modernizing the reporting regime. The proposal also aligns regulatory language with statutory updates and existing IRS guidance, including rules governing aggregation of wagers and the determination of proceeds in pari-mutuel betting contexts.

For operators, the change will require updates to internal systems, payout tracking, and compliance procedures. For taxpayers, the practical effect may be fewer information returns issued for smaller winnings, although all gambling income remains fully taxable regardless of reporting thresholds. The proposed regulations also implement recent statutory changes to IRC §165(d), which now limit the deductibility of wagering losses to 90% of losses, up to the amount of wagering gains, beginning in 2026.

This represents a departure from prior law, under which taxpayers could generally deduct 100% of their wagering losses (subject to the limitation of wagering gains). However, the new limitation has the potential to create “phantom income”, taxable income in excess of a taxpayer’s net economic gain. For example, a taxpayer with $100,000 in winnings and $100,000 in losses would now be limited to deducting $90,000 of those losses, resulting in $10,000 of taxable income despite breaking even economically. Taken together, these changes ease reporting burdens on payors while simultaneously tightening the rules governing loss deductions for taxpayers. 

From a compliance perspective, gaming operators should evaluate updates to information reporting systems and thresholds, adjustments to withholding and documentation procedures, and coordination with evolving IRS forms and instructions. Gamblers should carefully consider the impact of the new loss limitation on effective tax rates and recordkeeping practices. Although these rules are subject to the open comment period before finalization, taxpayers and industry participants should begin preparing now. For more information, contact Liskow attorneys Leon Rittenberg III, Caroline Lafourcade, and Kevin Naccari, and visit Liskow’s Tax Practice page. 

Following a Unanimous Supreme Court Decision, Defendants Remove Most Louisiana Coastal Cases to Federal Court

2 minute read

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An 8-0 ruling by the Supreme Court of the United States that a lawsuit by a Louisiana parish and state agencies against Chevron belongs in federal court has cleared the way for a jurisdictional shake-up in the long-running litigation. On April 27, defendants removed most of the remaining lawsuits back to federal court. Those curious about the differences between state and federal courts may read more here.

The Louisiana lawsuits claim that common and well-known historical practices in energy development—such as dredging canals, processing oilfield fluids in earthen impoundments, or discharging produced water into coastal waters—give rise to present-day liability under a 1978 state permitting law. However, in Chevron, those same complained-of activities occurred during World War II, where the oil produced using those practices was also refined under contract with the federal government to supply aviation gasoline. This specialized fuel—and the Allies’ ability to generate it better and faster than the Axis powers—was a difference-maker in the outcome of the war. 

This is the premise of the SCOTUS jurisdictional ruling. The federal officer removal statute authorizes an officer or person acting under that officer to remove state suits “for or relating to any act under color of such office.” 28 U.S.C. §1442(a)(1). All eight participating Justices agreed that the Louisiana claims implicate Chevron’s wartime production. That production “relates to” Chevron’s refining of that oil into aviation gasoline for the military, which Chevron did as a contractor for the federal government. Thus, Chevron is entitled to a federal forum. 

Numerous other cases in the docket are identically situated to Chevron’s facts—including the case that reached a state court verdict against Chevron in 2025. Other cases have different permutations of relationships to wartime production. Importantly, the Supreme Court did not articulate rigid parameters for federal officer removal. It found that the Chevron case fit “comfortably within the ordinary meaning” of a suit that relates to performance of federal duties. Justice Ketanji Brown Jackson, concurring, agreed that Chevron’s facts shared a direct causal-nexus requirement, but noted her disagreement with the majority’s opinion that the federal officer removal statute “requires only an indirect relationship between the conduct targeted by the lawsuit and the asserted federal duties.”  So, while Chevron’s direct relationship met the federal officer test, indirect relationships will, too. Given the pervasive development of Louisiana’s coastal oil reserves during WWII, and the fact that coastal impacts and restoration strategies do not fit neatly into any geometric borders drawn for a lawsuit, the SCOTUS opinion has broad implications for jurisdiction in the docket.   

Future decisions will have to shape the more specific contours of indirect relationships sufficient to support federal officer jurisdiction. Louisiana federal courts will play a key role in this process. 

The 2026 Liskow CCS Legislative Update

5 minute read

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More than 40 bills either directly concerning Carbon Capture and Sequestration (“CCS”), or that could materially impact the potential industry in Louisiana, have been filed in the House and Senate during the 2026 Legislative Session. This represents nearly double the number of CCS-related bills initially introduced during the 2025 Legislative Session, underscoring the increasing attention surrounding the industry.

CCS remains a hot topic among legislators and stakeholders. While the proposals vary in scope and approach, the legislation introduced generally falls within the following overarching themes:

  • Authorizes Local Control Over CCS Operations
    • Several bills would give local parishes “veto” authority over CCS projects.
  • Removes/Restricts Expropriation Ability of CCS Companies
    • Various bills would remove—or significantly limit—the ability of private companies to expropriate right of ways for CO₂ pipelines. Additionally, there has been a focus on expropriation on a global scale, with many bills seeking to limit the ability of foreign adversaries and companies to expropriate land in Louisiana[AA1].
  • Expands Liability for CCS Operations
    • Statutory caps limiting liability for claims related to CCS incidents could also be repealed as a result of the proposed legislation. 

As of now, HB 7 has been the only bill to receive a hearing and did not advance following a 7–12 vote, while all remaining bills are still awaiting consideration. HB 79 is being heard this morning in the House Civil Law Committee, and HB 841 is scheduled to be heard Wednesday in the House Natural Resources Committee.

Read a brief overview of each proposed bill below: 

Bill #

Author

Description

HB 5

Rep. Johnson

Authorizes local option to determine whether Class VI carbon dioxide injection wells, carbon sequestration projects, and CO₂ pipelines may be permitted within a parish.

HB 6 

Rep. Johnson

Rapides Parish local option to determine whether Class VI carbon dioxide injection wells, carbon sequestration projects, and CO₂ pipelines may be permitted. 

HB 7

Rep. Johnson

Enacts the “Louisiana Landowners Protection Act” — Elimination of eminent domain relating to CCS pipeline or storage.

HB 37 

Rep. Owen 

Bars expropriation by foreign entities.

HB 79

Rep. R. Carter

Removes statutory caps on noneconomic damages recoverable in civil actions related to carbon dioxide storage facilities and pipelines, eliminating the current $250K/$500K limits.

HB 80

Rep. R. Carter

Establishes strict liability for owners or operators of CCS facilities, or pipelines transporting CO₂  for geologic storage, for any damages caused by an authorized release or loss of containment.

HB 180

Rep. Owen

Defines foreign adversary, and agent thereof, for purposes of eminent domain.

HB 195

Rep. Owen 

(Constitutional Amendment) Bars any private entity that is a “foreign adversary” or an “agent of a foreign adversary” from expropriating or damaging property.

HB 284

Rep. Wyble

Authorizes a parish or municipality with a population of less than 50,000, referred to as a “governing authority”, to expropriate abandoned or blighted property by a declaration of taking.

HB 327

Rep. McCormick

Makes CCS illegal without consent of property owner.

HB 449

Rep. Geymann

Requires expropriating authority to pay court costs in all cases.

HB 493

Rep. Carter

Prohibits Amite River Basin and Water Conservation District from expropriating property in East Feliciana and St. Helena parishes. 

HB 494

Rep. Carter

Prohibits CCS in St. Helena Parish. 

HB 495

Rep. Firment 

Grant Parish local option to determine whether Class VI carbon dioxide injection wells, carbon sequestration projects, and CO₂ pipelines may be permitted.

HB 497

Rep. Schamerhorn

Vernon Parish local option to determine whether Class VI carbon dioxide injection wells, carbon sequestration projects, and CO₂ pipelines may be permitted.

HB 498

Rep. Schamerhorn

Beauregard Parish local option to determine whether Class VI carbon dioxide injection wells, carbon sequestration projects, and CO₂ pipelines may be permitted.

HB 499

Rep. McCormick

Establishes that nonconsenting pore space owners within a carbon dioxide storage unit must receive no less than the average per-acre compensation paid to other owners. Allows courts to request information to determine just compensation.

HB 500

Rep. McCormick

Requires carbon dioxide storage unit operators to compensate nonconsenting mineral owners for stranded mineral value if drilling is prevented, or reimburse additional costs required to drill through a storage unit.

HB 501

Rep. Carrier

Allen Parish local option to determine whether Class VI carbon dioxide injection wells, carbon sequestration projects, and CO₂ pipelines may be permitted. 

HB 504

Rep. Schamerhorn

Sabine Parish local option to determine whether Class VI carbon dioxide injection wells, carbon sequestration projects, and CO₂ pipelines may be permitted. 

HB 507

Rep. McCormick

Repeals the statutory civil liability caps applicable to owners or operators of carbon dioxide storage facilities and transmission pipelines. Removes existing noneconomic damages limits in CCS-related litigation.

 

HB 509

Rep. Owen 

Requires a public hearing in every parish where a Class V or Class VI geologic sequestration well permit is proposed. Hearing must occur within the first 15 days of the public comment period and not between Dec. 20 and Jan. 1.

 

HB 510

Rep. Schamerhorn

Prohibits the sequestration of carbon dioxide in Louisiana unless the CO₂ was generated within the state. Requires all statutory conditions be met prior to reservoir use or eminent domain for storage.

HB 566

Rep. Owen 

Prohibits the use of state funds for programs or initiatives tied to achieving net-zero greenhouse gas emissions goals, with limited exceptions and a sunset of Jan. 1, 2031.

 

HB 589

Rep. Farnum

Prohibits construction of carbon dioxide transport pipelines within 500 feet of inhabited dwellings, schools, and healthcare facilities, adding setback requirements to existing Class VI well restrictions.

HB 595

Rep. Landry

Vests exclusive jurisdiction over development of the state’s natural resources in the department and prohibits local governments from enacting permitting requirements or other actions affecting that subject matter.

 

HB 671

Rep. Owen

Requires the Department of Conservation and Energy to appoint an independent acquisition agent to manage pre-petition procedures for carbon dioxide storage expropriations and requires the expropriating authority to reimburse related costs.

 

HB 820

Rep. Farnum

Requires carbon dioxide transporters to use a manifest system to track CO₂ from generation through storage or injection, with reporting, retention, and penalty provisions.

 

HB 840

Rep. Farnum

Requires notice and public hearings in affected parishes before issuance of carbon capture permits, orders, or certificates, including pipeline construction and certificates of public convenience and necessity.

 

HB 841

Rep. Geymann

Provides additional procedures for exercising eminent domain (not limited to only CO2 pipelines).

HB 877

Rep. Carter

Prohibits carbon capture facilities from sharing pipelines.

 

HB 878

Rep. Carter

Prohibits geologic storage of carbon dioxide beneath scenic river systems.

 

HB 879

Rep. Carter

Requires CO₂ storage operators to pay at least 25% of federal 45Q tax credits to landowners.

 

HB 1136

Rep. Carter

Prohibits the transport of carbon dioxide in rights-of-way used for petroleum transportation.

HB 1144Rep. OwenRequires pipeline operator of hazardous material to include contact information on pipeline signage.

HB 1152

Rep. Riser

Extends the fees paid by CO₂ sequestration storage facilities to create a Carbon Dioxide Community Safety and Protection program. 

HB 1156

Rep. Bacala 

Comprehensive CCS safety regulation bill. 

SB 60

Sen. Wheat

Enacts the “Louisiana Landowners Protection Act,” – Companion to HB 7

 

SB 61

Sen. Wheat

Authorizes parish governing authorities or parish-wide elections to prohibit or allow CCS Project – Companion to HB 5

 

SB 62

Sen. Wheat

Prohibits construction of carbon dioxide pipelines within the boundaries of Lake Maurepas and Lake Pontchartrain.

 

SB 63

Sen. Wheat

Prohibits construction of carbon dioxide pipelines within the Maurepas Swamp, Joyce, and Manchac Wildlife Management Areas.

 

SB 200

Sen. Hodges 

Allows LA military department to expropriate immovable property within 50 miles of military base if it is owned or controlled by a foreign adversary. 

SB 395

Sen. Miguez

Requires State to expropriate property if owned by China, Chinese Communist Party, a China incorporated organization, or a citizen of China, and deems the taking an exercise of state governmental powers for a necessary and public purpose under the Louisiana Constitution.

SB 466

Sen. Sebaugh

Provides that no property expropriated pursuant to the authority of this Section shall ever, directly or indirectly, be sold or donated to any foreign power, any alien, or any corporation in which the majority of the stock is controlled by any foreign power, alien corporation, or alien that is considered a foreign adversary as identified in 15 CFR 7.4(a) and identified in the database maintained by the United States Department of the Treasury, office of foreign assets control, if the property is within fifty miles of a military base.

Liskow will continue to share regular updates throughout this session about CCS legislation on the 2026 CCS Legislative Update page from Liskow attorney and Louisiana Lobbyist Neil Abramson and CCS attorney Jeff Lieberman.

U.S. Treasury to Increase Scrutiny of Tax-Exempt Organizations Through Form 990 Transparency Initiative

2 minute read

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The U.S. Department of the Treasury recently announced a new compliance initiative aimed at increasing transparency among tax-exempt organizations. In its April 23, 2026 press release, “Treasury Announces Form 990 Transparency Initiative to Expose Hidden Funding and Strengthen Oversight,” Treasury indicated that the Internal Revenue Service plans to revise Form 990 to require enhanced reporting by organizations described in Section 501(c)(3).

The proposed revisions are expected to focus on areas where Treasury and the IRS perceive heightened risk of misuse of funds, including government grants and contracts, as well as fiscal sponsorship arrangements. Treasury emphasized that these categories often involve substantial public funding and complex organizational structures, which can obscure the flow of funds and complicate oversight. Enhanced reporting is intended to provide greater clarity regarding the sources and uses of funds, improve revenue classification, and reduce the risk of fraud or abuse.

The initiative also reflects growing concern among policymakers regarding fiscal sponsorship arrangements, which Treasury acknowledged are often lawful but may, in certain cases, be used to obscure operational control or financial activity. By requiring more detailed disclosures, Treasury aims to ensure that both regulators and the public can better evaluate how tax-exempt organizations operate and deploy resources.

Importantly, Treasury and the IRS indicated that the contemplated changes will be implemented through proposed regulations, with an opportunity for public comment prior to finalization. The agencies also noted that they will consider administrative and reporting burdens in developing the final rules. 

Tax-exempt organizations, particularly those receiving government funding, should closely monitor these developments. If adopted, the proposed revisions could expand disclosure obligations and increase enforcement risk. For more information, contact Liskow attorneys Leon Rittenberg III, Caroline Lafourcade, and Kevin Naccari, and visit Liskow’s Tax Practice page. 

Preserving Claims for Refund of Employee Retention Credits (ERC) – Time May Be Running Out!

2 minute read

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The Internal Revenue Service (IRS) Independent Office of Appeals (IRS Appeals) has been slow to resolve Covid-era Employee Retention Credit (ERC) refund claims.  As a result, employers with unresolved ERC claims are now faced with a difficult decision — pursuing litigation against the IRS to secure their ERC refunds or losing the refund.  

The ERC, which was offered under IRC §3134 as part of the IRS’s COVID-19 pandemic relief program, provided a refundable credit against employment taxes for certain tax periods to help struggling businesses pay their employees. The program has been scrutinized due to fraudulent claims.

In February 2026, the U.S. Government Accountability Office announced that, as of December 31, 2025, the IRS had closed all non-examined ERC claims. Approximately 41,000 claims remained under IRS examination or in Appeals at that time.

Many of the ERC claim disallowances issued in the summer of 2024 have been challenged by employers who filed appeals. However, the two-year deadline to file a refund suit following a disallowance notice is fast approaching, forcing taxpayers to decide how to proceed while their unresolved claims linger in IRS examinations and appeals.

Administrative delay does not eliminate judicial deadlines.  Under IRC §6532(a), taxpayers generally have two years from the date a notice of disallowance is mailed to file a refund suit or obtain a written extension from the IRS.  A protest to IRS Appeals does not suspend that deadline. Without filing suit or obtaining a written extension (Form 907, Agreement to Extend the Time to Bring Suit), the right to a refund can be permanently lost. 

While a Form 907 would eliminate the need for filing a lawsuit, the process for obtaining an agreement from the IRS to extend the time to bring suit has been difficult, and conflicting.

For taxpayers with ERC claims that are pending without action (i.e., where there has not been any disallowance), the statute of limitations analysis is more complex. Some courts have dismissed taxpayer refund suits that were filed more than six and a half years after the claim arose.   This timeframe reflects the six-month waiting period before a taxpayer may file suit, plus the six-year statute of limitations for civil claims against the government. IRC § 3702(b). For ERC claims submitted in 2020, the end of this six-and-a-half-year period is quickly approaching. To the extent a court will apply this limitation, a taxpayer with an ERC refund claim may be barred from suit even without a formal disallowance by the IRS.

Businesses facing challenged, delayed, or disallowed ERC claims should evaluate their statute posture without delay in order to protect their right to an ERC refund as protective litigation may be necessary to preserve their potential refunds. 

For more information, contact Liskow attorneys Caroline Lafourcade and Kevin Naccari, and visit Liskow’s Tax Practice page. 

the two-year deadline to bring a refund suit following a disallowance notice is fast approaching forcing taxpayers to decide how to proceed with their unresolved claims still lingering in IRS examinations and appeals.

Full Steam Ahead? FY 2027 Budget Signals Continued Federal Support for U.S. Shipyards

2 minute read

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The fiscal year 2027 budget proposal released by Donald Trump includes $105 million in funding for the U.S. Maritime Administration’s Small Shipyard Grant Program, matching the record funding level proposed for fiscal year 2026. According to the Small Shipyard Grant Coalition, the continued commitment at this level reflects sustained federal focus on strengthening the domestic shipbuilding sector, particularly among small and mid-sized shipyards that play a critical role in repair, maintenance, and new vessel construction.

The Small Shipyard Grant Program has long served as a key source of federal support for shipyard modernization efforts, providing funding for capital improvements such as equipment upgrades, efficiency enhancements, and workforce development initiatives. Last year, $35 million of grants were awarded under the program. Grant applications can be filed online on the federal government’s website. Maintaining the $105 million request signals that policymakers continue to view these investments as essential to preserving the competitiveness and operational capacity of smaller shipyards across the United States.

In addition to continued funding for existing programs, the proposal introduces a new initiative (the Commercial Shipbuilding Infrastructure Development Program) with a recommended funding level of $250 million. While details regarding eligibility and program structure have not yet been released, the initiative suggests a broader strategic effort to expand and modernize the nation’s shipbuilding infrastructure. Industry stakeholders are expected to closely monitor forthcoming guidance to assess potential opportunities under this new program.

The budget proposal now advances to Congress, where appropriators will determine final funding levels. As with prior years, the ultimate outcome will depend on bipartisan support in both chambers. Notably, Bill Cassidy and Tammy Baldwin are leading a bipartisan effort in the Senate to secure full funding for the Small Shipyard Grant Program at the requested $105 million level, reflecting continued legislative interest in supporting the maritime industrial base.

The coalition has emphasized the importance of industry engagement during the appropriations process, noting that similar efforts are underway in the House of Representatives. Outreach efforts are expected to intensify in the coming months as stakeholders advocate for sustained or increased funding, particularly in light of ongoing supply chain pressures and workforce challenges affecting the shipbuilding sector.

Taken together, the administration’s proposal underscores a continued policy emphasis on domestic shipbuilding capacity and infrastructure investment. For shipyard operators and maritime businesses, the coming appropriations cycle will be critical in determining the availability of federal funding opportunities and shaping the trajectory of industry support in the years ahead. For more information, contact Liskow attorneys Leon Rittenberg III, Caroline Lafourcade, and Kevin Naccari, and visit Liskow’s Tax Practice page.