A pandemic tax break for small businesses has turned into a ‘modern-day gold rush’ as consultancy firms charge fees to help entrepreneurs get their hands on Government cash.
The Employee Retention Credit (ERC) – which offers up to $26,000 for each worker a company kept employed during lockdown – has already cost taxpayers more than $150 billion.
And by July that figure could be as high as $220 billion, according to investment bank Piper Sandler. It would mean the relief has cost more than triple Congress’ initial estimates.
The spike in payouts is partly fueled by relentless advertising from firms who help entrepreneurs work out what they are owed. Among them is ‘Bottom Line Concepts’ – a business plugged frequently by Shark Tank star Kevin O’Leary.
Bottom Line has helped clients pursue more than $6 billion in ERC refunds, helping them to earn as much as $1 billion, according to the Wall Street Journal.
By July the total cost of the ERC program could be as high as $220 billion, according to investment bank Piper Sandler. It would mean the relief has cost more than triple Congress ‘ initial estimates
It charges between 15 and 25 percent fees for any refund it helps a customer secure. Around 10 percent of this sum is then passed onto its ‘affiliates’ who introduce clients to the firm, the WSJ reports.
Bottom Line told DailyMail.com that the ERC filing is a ‘highly complex’ operation and the fees cover the cost of its expertise. The business employs certified public accountants, attorneys and former IRS officials among others to help smooth the process for filers.
Congress devised the ERC in 2020 as an emergency measure to keep employees on payrolls during the pandemic.
The relief expired in late 2021 however the window to claim the credit retrospectively is open until April 2025.
It has prompted a spate of email, text and broadcast adverts from firms like Bottom Line. The firm, based in North Miami Beach, Florida, points out it complies with the law, follows IRS guidelines and comes with no upfront fees.
The spike in payouts is partly fueled by aggressive advertising from firms who help entrepreneurs work out what they are owed. Among them is ‘Bottom Line Concepts’ – a business plugged frequently by Shark Tank star Kevin O’Leary
In one online video, 46-year-old founder Josh Fox promises: ‘You would make $1.3 million if you can bring 100 clients to us in a two-year period. This is your opportunity.’
In another clip, he adds: ‘This is the modern-day gold rush.’
Business has been bolstered by repeated endorsements from O’Leary who meets with the team at least weekly, according to the WSJ.
The TV entrepreneur and Bottom Line are both partners in WonderTrust – a website for booking ERC claims. WonderTrust has submitted $140 million in ERC claims for more than 780 employers.
In a video uploaded to O’Leary’s YouTube page, he is filmed sitting next to Fox to discuss the credits.
He tells the camera: ‘All my people teamed up with Bottom Line Concepts and said ‘look, let’s form a partnership and get the word out there.
Business Line’s founder Joshua Fox is pictured with Christina Ricci and Jason Binn at a media event in New York in March this year
‘Let’s go to town and get every small business in America to apply for this and if they do qualify let’s get them an expert to actually go through the whole program and get their application in front of the IRS as fast as possible.’
The IRS does not comment on specific companies but back in July the agency’s commissioners said: ‘The amount of misleading marketing around this credit is staggering.
‘This was not how the law was intended to work.’
Bottom Line was set up in 2009 originally to help companies reduce their shipping, utility and office-supply bills and claim tax benefits.
Today, the ERC accounts for more than 75 percent if its revenue, the Wall Street Journal reported.
A spokeswoman for Bottom Line said: ‘We are proud of the company’s record of delivering valuable services to American businesses with no upfront fees in a compliant and transparent manner, including educating small businesses on the ERC program and helping them reinvest in their business and their workforce to the benefit of local communities across the country.’
Representatives for Kevin O’Leary were also approached for comment.
#pandemic #tax #break #small #businesses #cost #taxpayers #billions #turned #modern #gold #rush #consultancy #firm #plugged #Shark #Tank #star #Kevin #OLeary
More From Shayari.Page