How a pandemic tax break for small businesses – which has already cost taxpayers billions – turned into a ‘modern gold rush’ thanks to the consultancy contacted by Shark Tank star Kevin O’Leary
- The Employee Retention Credit was created as an emergency response to the lockdown.
- The relief expired at the end of 2021, but businesses have until April 2025 to file a claim.
- Firm Bottom Line Concepts – plugged in by O’Leary – charges a 15-25% fee to help companies get paid
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 provides up to $26,000 for each worker a company has retained 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. That would mean the relief cost more than triple Congress’ original estimates.
The rise in payments is partly fueled by relentless corporate advertising that helps contractors determine what is owed to them. Among them is “Bottom Line Concepts”, a company frequently highlighted by Shark Tank star Kevin O’Leary.
Bottom Line has helped clients secure over $6 billion in ERC refunds, helping them win up to $1 billion, according to the the wall street journal.
By July, the total cost of the ERC program could reach $220 billion, according to investment bank Piper Sandler. That would mean the relief cost more than triple Congress’ original estimates.
He charges between 15-25% in fees for any refund he helps a customer get. About 10 percent of this sum is then paid to its “affiliates” who introduce clients to the firm, the WSJ reports.
Bottom Line told DailyMail.com that the ERC’s filing is a “very complex” operation and the fee covers the cost of its expertise. The company employs certified public accountants, attorneys, and former IRS officials, among others, to facilitate the process for filers.
Congress designed the ERC in 2020 as an emergency measure to keep employees on the payroll during the pandemic.
The relief expired at the end of 2021, but the window to claim the credit retrospectively is open until April 2025.
This sparked a flurry of emails, text messages and advertisements from companies like Bottom Line. The company, based in North Miami Beach, Florida, stresses that it complies with the law, follows IRS guidelines and has no upfront costs.
The rise in payments is partly fueled by aggressive corporate advertising that helps contractors determine what is owed to them. Among them is “Bottom Line Concepts” – a company frequently touted by Shark Tank star Kevin O’Leary.
In an online video, Josh Fox, the 46-year-old founder, promises, “You would make $1.3 million if you could bring 100 clients to us over a two-year period. This is your opportunity.
In another clip, he adds: “It’s the gold rush of modern times. »
Business has been buoyed by repeated endorsements from O’Leary, who meets with the team at least once a week, according to the WSJ.
The TV Contractor and Bottom Line are both partners of WonderTrust, a website for booking ERC claims. WonderTrust has submitted $140 million in ERC claims for over 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 of my people teamed up with Bottom Line Concepts and said, ‘Look, let’s partner up and get the word out. »
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 ask all small businesses in America to apply for this and if they qualify, let’s get them an expert to go through the whole program and file their application in front of the IRS as soon as possible.”
The IRS does not comment on specific companies, but in July agency commissioners said, “The amount of misleading marketing around this credit is staggering.
“That was not how the law was supposed to work.”
Bottom Line was created in 2009 to help businesses reduce shipping, utility and office supply bills and gain tax benefits.
Today, the ERC represents more than 75 percent if its revenues, the the wall street journal reported.
A Bottom Line spokeswoman said, “We are proud of the company’s ability to provide valuable services to American businesses at no upfront cost, in a compliant and transparent manner, including raising awareness of the ERC program among small businesses and helping them reinvest in their business and workforce to benefit local communities across the country.
Representatives for Kevin O’Leary have also been contacted for comment.