IRS Letter 6612: What It Means and How to Respond

If you've received IRS Letter 6612, your Employee Retention Credit claim is officially under examination. The IRS has sent over 84,000 of these audit notification letters to businesses across the country. This letter marks the beginning of the ERC audit process and comes with a strict 30-day deadline that you cannot afford to miss.

What is IRS Letter 6612?

Letter 6612 is the IRS's official notification that your ERC claim has been selected for audit. Unlike a simple inquiry, this letter signals that the IRS intends to thoroughly examine your claim to determine if you legitimately qualified for the credit.

The letter typically arrives with Form 4564 (Information Document Request), which contains 13 multi-part questions requesting specific documentation about your eligibility. This is not a form letter you can ignore—it's the first step in a formal audit process.

Why Did You Receive This Letter?

The IRS is targeting ERC claims for several reasons:

• High-risk indicators: Your claim may contain elements the IRS considers suspicious, such as claiming full quarters or large amounts without clear eligibility documentation.
• ERC mill involvement: If your claim was filed by an aggressive promoter, it may have been flagged for review.
• Random selection: Some claims are selected randomly as part of the IRS's compliance efforts.
• Industry patterns: Certain industries have higher audit rates due to patterns of improper claims.

The 30-Day Deadline: Why It Matters

The response deadline on Letter 6612 is not flexible. If you fail to respond within 30 days:

• Automatic disallowance: The IRS may deny your entire claim without further review.
• Loss of appeal rights: Failing to respond can limit your options for challenging a denial.
• Penalties and interest: If you've already received your refund, you may owe it back plus penalties and interest.

What Documents Does the IRS Want?

Form 4564 included with Letter 6612 typically requests:

• Government orders: Documentation of federal, state, or local orders that suspended your business operations or significantly impacted your ability to operate.
• Gross receipts records: Quarterly financial statements showing the decline in gross receipts compared to 2019.
• Payroll records: Detailed payroll records showing qualified wages paid during eligible quarters.
• PPP documentation: Records of PPP loans, forgiveness applications, and how you allocated wages between PPP and ERC.
• Business impact evidence: Documentation showing how government orders affected your specific business operations.

How to Respond to Letter 6612

Responding properly to Letter 6612 is critical. Here's the process:

1. Gather your documentation: Collect all records related to your ERC eligibility before responding.
2. Review your original claim: Understand exactly what was claimed and why you believed you qualified.
3. Prepare written responses: Answer each question on Form 4564 thoroughly and accurately.
4. Consider professional help: For claims over $50,000, professional representation significantly improves outcomes.
5. Submit before the deadline: Send your response via certified mail or fax to document timely submission.

What Happens After You Respond?

After submitting your response, the IRS examiner will review your documentation. Possible outcomes include:

• Claim approved: If the examiner is satisfied with your documentation, your claim will be allowed.
• Additional questions: The examiner may request more documentation or clarification.
• Partial disallowance: Some quarters or amounts may be denied while others are approved.
• Full disallowance: If the examiner determines you didn't qualify, you'll receive a disallowance letter with appeal rights.