In yet another twist in the unending legacy of pandemic stimulus money, Employee Retention Credits (ERC’s) now have a new use. We’re currently doing the Mergers and Acquisition Due Diligence on two smaller transactions where the seller had payrolls and didn’t not claim the ERC.
The buyer in each instance, intends to purchase the company rather than just the assets. In purchasing the company as a whole, the buyer will then have the right if they qualify, to claim the credits.
The money potentially received from the credits will reduce the cost of the businesses by between 55% – 70%. This is putting a twist on business purchases that no one could have predicted.
Purchasing a business as a whole is generally frowned upon. In buying the entire business, a buyer opens themselves up to all sorts of potential legal claims.
Maybe someone decides to file a lawsuit over a transaction that happened five or ten years ago? Maybe the IRS decides to initiate an audit going back three years after the transaction is consummated.
There’s only so much due diligence that can possibly be performed to protect a client. In both of the situations that I just mentioned, how could anyone see either of them coming?
But both of the buyers have decided that the probability of getting the majority of their purchase prices paid by the government, is significant enough to take the risks involved in purchasing the entity as a whole.
Time will tell how this plays out.
Let me leave you with this.
As a Reminder
Our Employee Retention Credit Seminar is restricted to the first 100 guests and is filling up fast. If you or any of your friends haven’t yet claimed the credit, don’t be left out.
The seminar is Wednesday. Please register today.
When: May 18, 2022 02:00 PM Central Time (US and Canada)
Register in advance for this meeting:
https://us06web.zoom.us/meeting/register/tZUpd-igqTsvGtU56nOJiQm9o0V6gfOrGgQF
After registering, you will receive a confirmation email containing information about joining the meeting.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, M&A Due Diligence, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.