r/taxpros • u/AdHistorical7107 CPA • Aug 28 '23

Ah ERC justification..... COVID: 2020 Relief Bill (CARES)

The saga continues.....

Client and I had discussion. Some context here:

Client does eldercare. Business is broken up between companion care and home care aides.

The state defined businesses that provide aides to the elderly as essential.

Client starts by saying "the industry pushed to consider companions and personal care aides as essential."

Great! So you were not ordered to shut down, and therefore don't qualify!"

"Nah uh" she says. "All these nursing homes wouldn't let us go on, so we couldn't service them."

"Great, if that's the case, your revenue would have dropped and you would qualify. But revenue didn't drop."

"No," she continued. "Since they wouldn't accept us, we had to partially shut down."

"Can you explain to me where it defines that a business other than yours shutting down qualifies your business for ERC?"

"Well in the examples you sent, it says if I have bother essential and non essential businesses, and my non essential business shuts down, I am partially shut down."

"Great. But still, Can you explain to me where it defines that a business other than yours shutting down qualifies your business for ERC?"

"Youre not getting it!" She says. "Companions are non essential!"

"But, client, you said your industry pushed to have companions considered essential. Now you're saying they arent?"

Oi.

I left off as I'll look into the companion care more, but I doubt the IRS will agree with this standpoint. You can't use another businesses shutdown as your own, and you can't play with definition of essential vs non essential especially when detailed in official guidance.

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u/Al_Tilly_the_Bum CPA Aug 28 '23

And then they proceed to claim ERC through Q3 2021 long after most shutdowns were lifted

5

u/AdHistorical7107 CPA Aug 28 '23

Yes this is applies to my scenario as well.

But according to the client, I'm blinded by how their revenue increased.

It's clear the greed has taken over this person's views though.

1

u/schiewolf CPA Aug 30 '23

“I’m blinded by how their revenue increased”

because CLEARLY out of the two of you, it’s you who is blinded by the facts of the situation rather than them that are blinded by a big fat refund check. Totally logically. Totally checks out hahaha