How to Apply Before Time Runs Out
No one could have ever dreamed that a pandemic would effectively shut down many sectors of our economy. Companies big and small were devastated. In an attempt to offset the damage, Congress passed the Cares Act, which entailed a program called the Employee Retention Credit. Not every business qualifies, but for those that do, it can make an enormous change in their business trajectory.
So the question remains—how do you know if your business qualifies, and if so, now what?
I have been a small business owner for more than 47 years. Until Covid, I had not ever asked for any sort of assistance from a government program. To me, this was a point of pride in my ability to self-sustain my business. But no one could have foreseen forced business closures by the government, so, I , like many other business owners, applied for and received the Payroll Protection Plan (PPP) funding through the Cares Act, as well as an Emergency Injury Disaster Loan. Without those two items, Cityview would have suffered substantially. This funding saved many businesses from having to close and enabled them to keep at least some of their employees on the payroll.
When I learned about the Employee Retention Credit (ERC) program, another part of the Cares Act program, I asked several people how to apply. All of those people said either that I wouldn’t qualify or that it was a scam. Many people I knew did not apply, mostly out of fear or mis-information. I have to admit, I drank the Kool-aid. That was, until I met Don Lawson, the owner of Smart Business Accounting.
I had called Don in the hopes of landing him as an advertiser. Despite his company’s national reach, Don is a local guy who has spent his whole life in Knoxville, primarily providing services to Knoxville businesses, as I would learn. In our initial meeting I asked what makes his type of accounting service different from others. Don’s reply was ironically that he no longer provided accounting or tax increment financing services. He and his team now focused exclusively on assisting companies in qualifying for and receiving ERC funding.
That statement led to a lively two-hour conversation and during that time I put Don to the test and laid out Cityview’s fact pattern. The reality is that, contrary to popular belief, getting PPP funding does not disqualify a business from applying for ERC. I will never forget Don’s quiet smile; I could tell he already suspected we would qualify. Within a few days, he had Cityview approved and the paperwork prepared for our filing.
Thinking about how much it would benefit Cityview made me think of all the business owners I knew that had most likely gotten bad advice about whether or not they qualified. It lit a fire in me. I authored an article in the September 2023 issue of Cityview hoping to spread accurate information about the program. That’s not to say that all businesses do qualify for ERC funding, but since meeting Don, I’ve introduced many companies to him and his team that he’s helped understand whether or not they do. Many of them have qualified. In fact, Don’s helped over 1,000 companies through the filing process. I look at it more that this meant tens of millions of dollars that are now here in our community helping local businesses grow and prosper.
Local companies may still be eligible for up to $21,000 dollars per each employee that they retained during the Covid-19 Pandemic. But new information has come out from the IRS that, with Don’s help, I want to help clarify so you know the options that are still available to you until April 15, 2025.
Cityview: What led you to focus Smart Business Accounting solely on the ERC program?
Don Lawson: Both my wife, Cindy, and I could see the damage the pandemic was doing to our friends who own local businesses. We decided to dig in and see if there was a way we could help.
CV: What do you attribute your level of expertise to?
DL: The Cares Act is over 28,000 pages and has dozens of revisions. We went through it all and then built custom software to aid in processing the information from our clients.
CV: Why do you feel so many accountants discourage their clients from seeing if they can qualify?
DL: The short answer is that they have not taken the time to fully read and understand the law, the second part of our answer would be they are afraid to recommend the program.
CV: But, this is a legitimate federal program put in place by a congressional bill, correct? I can understand not wanting to read 28,000 pages, but fear?
DL: First this is a program created by the Cares Act which is still in force. Second, the IRS has stated there is a lot of fraud and that could lead to audits. There is unquestionably some fraud with almost every government program. SBA strictly follows the rules of the law in every case, so there is no reason to be afraid.
CV: Is there any cost on the front end to see if a company qualifies?
DL: There is no upfront cost. We only get paid if you receive the funds from the IRS.
CV: Let’s cover common reasons people think they do not qualify. First, does the business have to have seen a decline in revenue to be eligible?
DL: Not necessarily. Revenue can increase or decrease based on all kinds of situations.
CV: Some businesses were required by government order to fully or partially suspend business activities. So does that generally mean they will qualify?
DL: In most cases that will qualify a company to receive ERC funding. Regardless, we still take time to fully understand and make sure they legitimately qualify.
CV: What if the business’s supply chain was affected and they were unable or had difficulty receiving products necessary for operation?
DL: That also qualifies most businesses. If your company was unable to operate at capacity due to restrictions imposed by the government, then you probably qualify.
CV: In the fall, the IRS released information that they were putting forth a “processing moratorium.” What do we need to know about this?
DL: Yes, the IRS in September stopped processing new claims. They’re still accepting new claims—they have to because the law is still in effect…so the way we’re doing it now is just the way that we’ve always done it.
CV: A recent IRS notice said that 10 to 20 percent of the claims are being denied because they’ve been flagged as “high risk.” What does this mean?
DL: This is new guidance. They’ve just now come out and said that they’re going to deny high-risk claims, but they’re not telling us what high-risk claims are.
CV: Didn’t the House of Representatives pass a bill that would effectively end the Cares Act?
DL: There was a bill passed, but it appears to have stalled in the Senate and, in my opinion, it has little chance of being revived in an election year.
CV: If they at some point end the program and your claim hasn’t been processed yet, will they still process it?
DL: It depends on how they ended the program. If they end it retroactively back to a date that we’ve already passed, anything filed after that date we would assume would not be paid. There’s a lot in flux.
CV: Should any of this deter businesses from applying for ERC funding?
DL: If they qualify, I tell every client to go ahead and submit a claim. And the reason for that is there’s no risk to the client at all…
There is no cost to find out if you qualify for the program. It takes very little time to provide us with the documents we need to analyze your situation. With no up front cost and no significant time required, you have nothing to lose.
CV: Out of curiosity, how many claims have you submitted at this point, and have you ever been denied?
DL: Over 1,000. And no. We’ve not had a single issue with any claim.
CV: How do businesses contact you?
DL: Give us a call at 865-705-7142 or send an email to dlawson@bbllawgroup.com.
One last note. I have personally taken the time to ensure that Don is a trustworthy source. I’m happy to answer any questions about my own journey with Don, should any business owner be interested but apprehensive. Feel free to send me an email to nathan@cityviewmag.com and we’ll set up a time.