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Dan Chodan

30 Apr, 4 tweets, 2 min read

@TGorcz

Hats off to @TGorcz for a very well written explanation of the >50% owner eligibility problem for ERC - while also discussing the issue of preparer penalties for taking positions without a "reasonable basis."
tomtalkstaxes.com/p/tom-talks-ta…

@edzollars

I agree with @edzollars that there is not a reasonable basis to take ERC for >50% owners.

https://twitter.com/edzollars/status/1384580510786101250?s=19

@TaxReductionCPA

@TaxReductionCPA Murray Bradford's article arguing "yes" does not even address the problem itself of 267(c) on ERC. So he didn't address whether there is a reasonable basis despite the problem.

@TGorcz

But what do you say @TGorcz? Your article laid it out well, but you avoided saying whether or not there is a reasonable basis.

Where are you at?

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Dan Chodan

@danchodan

5 Apr

Relatives of a greater than 50% owner are not eligible wages for ERC.

But are relatives of a LESS THAN 50% owner eligible for ERC? You would think so, but often even these relatives are ineligible.

Let's look at a very common example:
1/x

An S-Corporation is owned 50/50 by unrelated individuals, A and B. Each owner has a son employed in the business as well - Y and Z.

In total, the S-Corporation has four employees: owners A and B, and sons Y and Z.
2/x

The sons are obviously relatives of the owners, but since neither owner has greater than 50% of the S-Corporation ownership, there are no disallowed relative's wages. Right?

If this were the extent of the facts, I would agree. All four employee's wages qualify for ERC.
3/x

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Dan Chodan

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