LOS ANGELES, Calif., March 16, 2021 (SEND2PRESS NEWSWIRE) – James Cha, CPA and Certified Tax Resolution Specialist of Ace Plus Tax Resolution, highlights the restaurant revitalization fund, the latest restaurant industry tax challenges and tax break strategies.
Restaurant Revitalization Fund and Grants
In addition to small and medium-sized companies, the catering industry is also severely affected by the pandemic. However, governments have tried to ensure tax breaks are given to help the hospitality industry. This was effectively incorporated into the Restaurant Revitalization Act signed on March 11th. Ace Plus Tax Resolution certified tax clearing specialist James recommends that “restaurant owners facing financial problems must strategize and take full advantage of the Restaurant Revitalization Fund.”
$ 5 billion of the fund will be available to eligible restaurants with gross revenues of $ 500,000 or less in 2019.
Additionally, the core of this particular tax relief scheme provides grants for restaurant applicants of up to $ 10 million. The main purpose of this is to compensate them for the loss of income caused by the pandemic. In this regard, all restaurants are declared eligible for the program with a few exceptions, e.g. B. Restaurants operated by a state or local government, or owned by a public company. It should be noted, however, that the total grant granted to the company cannot exceed $ 10 million and should be limited to $ 5 million per physical location.
The grant amount is based on the pandemic-related loss of income. If the company was wholly or partially in business in 2019, the loss is calculated as the average 2020 gross monthly revenue multiplied by 12, subtracted from the 2019 average gross monthly revenue multiplied by 12. A different calculation method should be used if the business was closed at any time between Jan. January 2020 and the date of entry into force of the draft law on March 11, 2021. The grant will be reduced by the 7 (a) SBA loans received, including PPP loans.
Under this particular law, there are certain expenses that are eligible for restaurants. They mainly include wages and salaries, sick days paid, mortgages, rents and utilities, maintenance, supplies, food and beverage costs, operating costs and other costs that SBA deems material. In the same way, the grant is to be used for expenses that fall in the period covered between February 15, 2020 and December 31, 2021.
Grants received for the revitalization of restaurants are not subject to income tax. In the same way, the exclusion does not lead to a denial of a reduction in the deduction of the tax attributes or a refusal to increase the base. This means that these companies should not include the grant amount as gross income on their tax returns.
Tax problems for restaurant owners
James explains, “The Restaurant Revitalization Grant was a much needed life support for the troubled industry. After the pandemic, the hospitality industry may have been hardest hit by lockdowns as tax payments continued to be made. For one, wage taxes remain an urgent cause for concern for the catering industry. “
When their business struggles, restaurant owners are tempted to use these funds to cover business expenses. The IRS takes late payroll tax payments very seriously because it wasn’t business owners’ money to begin with. If the IRS believes that a person who was responsible for filing or paying taxes but did not do so, will be liable for the unpaid taxes.
Business owners need to be aware that the IRS has the power to shut down their business, personally indulge the owner by filing a trust fund recovery fine, collecting bank accounts, or confiscating sources of income and real estate to collect taxes. Also, your passport can be revoked or rejected by the U.S. Department of State for issue or renewal.
Tax relief for the catering industry
In the event the IRS approaches the company about back tax payments, the best possible course of action is to take an approach to treat the problem tactfully without panicking.
James believes “the best course of action is to see if you qualify for tax break options.” However, this is only possible after delinquent tax returns have been filed and all current income tax and wage tax deposits have been paid.
Companies or individuals can pay their taxes for much less than they owe through a compromise offer if they qualify. Financial insolvency is the most common reason for accepting an offer. However, it needs to be supported and verified by well-prepared financial documents and statements.
Or through an installment agreement, companies or individuals can set up an affordable payment plan to pay off the back taxes. If they qualify for a partial payment, they will not pay out the full amount as the balance remaining at the end of the payment period will be given away. Strategy is crucial when submitting an application to maximize benefits.
In addition, they may have the ability to stop IRS collection actions by declaring “Currently Uncollectible” status. In order to qualify for this status, they must prove that they have a poor financial situation and no to very low income. The IRS will pause its attempt to collect payments until the financial situation improves.
Today is a big challenge for almost all business owners. In this context, it is imperative for businesses to have a thorough understanding of all taxes owed to them and the options available to them. There are numerous tax break options offered by the government. However, business owners should consult with a certified tax break specialist to clearly understand their options and their legitimacy so that, as taxpayers, they can strategize, take full advantage of the benefits, and save significant sums of money.
Ace Plus Tax Resolution provides taxpayers with IRS and government tax problems permanent solutions to individuals and businesses struggling with unmanageable IRS tax problems. If you have any problems with payroll tax, contact the tax professionals for free advice.
James Cha is CPA and Certified Tax Resolution Specialist® at Ace Plus Tax Resolution. He represents his clients and has worked with the IRS for over 30 years. His practice is in Los Angeles, but his clients are across the country. Contact him at (213) 600-7388 or James@AcePlusTaxResolution.com.
NEWS SOURCE: Ace Plus Tax Resolution
This press release is issued on behalf of the Send2Press® Newswire news source (Ace Plus Tax Resolution), which is solely responsible for its accuracy. Information is believed to be correct but not guaranteed. Story ID: 69677 APDF-R8.2
© 2021 Send2Press®, a press release and e-marketing service from NEOTROPE®, California, USA.
Disclaimer: This press release content was not produced by the Associated Press (AP).
Copyright 2021 Send2Press Newswire