How a pandemic tax break for small businesses – which has already cost taxpayers billions – has turned into a ‘modern gold rush’ thanks to consultancy firm plugged by Shark Tank star Kevin O’Leary
How a pandemic tax break for small businesses — which has already cost taxpayers billions — has turned into a “modern day gold rush” thanks to consulting firm affiliated with Shark Tank star Kevin O’Leary
- Employee Retention Credit was created as an emergency response to the lockdown
- Relief expired at the end of 2021, but companies have until April 2025 to file a claim
- Firm Bottom Line Concepts – affiliated by O’Leary – charges a 15-25% fee to help companies receive a payout
A pandemic tax break for small businesses has turned into a “modern day gold rush” as consulting firms charge fees to help entrepreneurs get their hands on government money.
The Employee Retention Credit (ERC) — which offers up to $26,000 for every employee a company kept on during the lockdown — has already cost taxpayers more than $150 billion.
And by July, that figure could reach $220 billion, according to investment bank Piper Sandler. It would mean that the aid has cost more than three times the initial Congressional estimates.
The spike in payouts is fueled in part by relentless advertising from companies helping business owners figure out what they’re entitled to. Among them is ‘Bottom Line Concepts’ – a company regularly plugged by Shark Tank star Kevin O’Leary.
Bottom Line has helped clients pursue more than $6 billion in ERC refunds, earning as much as $1 billion, according to the Wall Street Journal.
According to investment bank Piper Sandler, the total cost of the ERC program could reach $220 billion by July. It would mean that the aid has cost more than three times the initial Congressional estimates
It charges between 15 and 25 percent for every refund it helps secure a customer. About 10 percent of this amount is then passed on to the “affiliates” who introduce customers to the company, the WJ reports.
Bottom Line told DailyMail.com that the ERC application is a “very complex” operation and the fees cover the cost of the expertise. The company employs certified public accountants, attorneys, and former IRS officials, among others, to help smooth the process for petitioners.
Congress created the ERC in 2020 as an emergency measure to keep workers on payroll during the pandemic.
The exemption expired at the end of 2021, but the period to claim the credit retroactively is open until April 2025.
It’s spawned a wave of email, text, and broadcast ads from companies like Bottom Line. The company, based in North Miami Beach, Florida, points out that it complies with the law, follows IRS guidelines, and has no upfront costs.
The spike in payouts is fueled in part by aggressive advertising from companies helping business owners figure out what they’re entitled to. Among them is ‘Bottom Line Concepts’ – a company regularly plugged by Shark Tank star Kevin O’Leary
In an online video, 46-year-old founder Josh Fox promises, “You’d make $1.3 million if you could bring 100 customers to us over a two-year period. This is your chance.’
In another excerpt he adds, “This is the modern gold rush.”
Matters have been bolstered by repeated messages of support from O’Leary, whom the team meets at least weekly, the WJ.
The TV entrepreneur and Bottom Line are both partners in WonderTrust – an ERC claims booking website. WonderTrust has filed $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 discussing the credits.
He tells the camera, “All my people were working with Bottom Line Concepts and said, ‘Look, let’s form a partnership and spread the word.’
Business Line 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 qualify, let’s send them an expert who will actually go through the entire program and get their application to the state as soon as possible.” file IRS.”
The IRS does not comment on specific companies, but in July agency commissioners said, “The amount of deceptive marketing surrounding this credit is staggering.
“This was not how the law was intended.”
Bottom Line was originally founded in 2009 to help businesses reduce their shipping, utility, and office supply bills and claim tax breaks.
Today, the ERC accounts for more than 75 percent of its revenue Wall Street Journal reported.
A spokeswoman for Bottom Line said, “We are proud of the company’s track record of providing valuable services to U.S. businesses, at no upfront cost, in a compliant and transparent manner, including educating small businesses about the ERC program and helping them reinvest in their business and operations. workforce for the benefit of local communities across the country.”
Representatives for Kevin O’Leary were also contacted for comment.