Scam Alert: Distraint Warrant Scam
Jul 05, 2023
William Vaughan Company was recently made aware of a highly concerning scam surfacing in Lucas County. Many local businesses have received fraudulent “Distraint Warrants” in the mail, sent by a fictitious entity called the “Tax Resolution Unit.” While these letters seem to primarily target businesses, a handful of individuals have also received them. In the interest of our community and the individuals we serve, here are some important detail about this distraint warrant scam along with essential tips on safeguarding yourself against such fraudulent activities.
The Scam:
In this distrain warrant scam, individuals and businesses receive official-looking documents in the mail from the Lucas County “Tax Resolution Unit.” The document claims that a Distraint Warrant has been issued against the recipient due to unpaid tax debts. The scammers exploit fear and urgency, attempting to coerce victims into making immediate payments via telephone to a toll-free number. However, it’s crucial to note that Lucas County does not have a Tax Resolution Unit or an office of Public Judgment Records.
How to Protect Yourself:
Verify the source: Take a moment to verify the authenticity of any suspicious document you receive. Contact the relevant county offices or authorities to confirm the legitimacy of the warrant or notification. Don’t hesitate to reach out to our team if you need assistance in this regard.
Exercise caution: Be wary of unexpected or unsolicited communications regarding taxes or debts. Genuine organizations typically communicate through official channels and offer multiple opportunities to resolve any issues. Be skeptical of sudden demands for payment or urgent actions.
Guard your personal information: Under no circumstances should you share sensitive personal or financial information, such as social security numbers, bank account details, or credit card numbers, in response to such requests. Legitimate authorities, like the IRS, will not ask for this information via email or phone. Nor will the IRS take payment by cashier’s check, in the form of gift cards, or wire transfer.
Report the scam: If you receive a suspicious document or believe you have encountered a scam, promptly report it to the relevant authorities. You can report it to the IRS by either calling 1-800-366-4484 or visiting the US Treasury website. Consider calling your local police so it is aware of the scam as often times communities are targeted all at once. Finally, the Federal Trade Commission’s Report A Fraud site is shared with law enforcement across the country. Your report can help bring attention to the scam and prevent others from falling victim.
Spread awareness: Share this information with your friends, family, and colleagues to raise awareness about the scam. Utilize social media, local community groups, or any platform that can reach a wider audience. The more people are informed, the harder it becomes for scammers to succeed.
As trusted tax and business advisors, our clients’ financial well-being and security is our top priority. The “Distraint Warrant” scam targeting Lucas County residents and businesses is an unfortunate reminder of the dangers posed by fraudulent activities. However, by staying vigilant, verifying sources, and reporting suspicious incidents, we can collectively protect ourselves and our community from falling victim to these scams. If you have any concerns or require assistance, please don’t hesitate to contact us.
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wvco.com
Categories: Fraud & Forensics, Tax Compliance
Exploring Opportunity In The Ohio Regional 166 Direct Loan Program
Jun 22, 2023
The Ohio Regional 166 Direct Loan Program is a state-funded loan pool that provides low-interest loan financing assistance to businesses for the allowable costs of eligible projects within the state to promote economic development, business expansion, and job creation.
Program details:
- The program may finance up to 40% of an eligible project, with loans up to $1,000,000
- A minimum of 10% equity contribution is required from the borrower in the eligible project, however, a greater equity contribution may be required based on due diligence. The remaining eligible project shall be funded by the borrower either directly or indirectly through third-party investors and/or private lenders.
- Interest rates shall be fixed at or below local market rates at the time the loan is presented to Development for approval.
How can I use the loan?
- Land and/or building purchases – if the project involves the purchase of an existing building, the business must occupy at least 51 percent of the premises;
- Machinery & equipment purchases;
- Building construction and/or renovation costs – in case of construction, the business must occupy at least 60 percent of the premises;
- Long-term leasehold improvements;
- Ongoing fixed asset purchases; and
- Capitalizable costs directly related to a fixed-asset purchase.
Are there any associated costs?
Yes. There is a commitment fee equal to 1.25% % of the loan amount capped at $12,500 due to proceed with the loan closing and loan documentation process. Also, the annual servicing fee which is equal to 0.25% of the outstanding principal amount of the loan is pro-rated and payable monthly
Who can apply?
This program has been leveraged primarily by the following types of for-profit businesses:
- Manufacturing & Distribution
- Research & Development
- Owner-occupied commercial real estate
Next steps
Applications are accepted by the Program Administrators who perform preliminary investigations into the financing needs and the business seeking funding. Locally, the Toledo-Lucas County Port Authority serves as a Program Administrator. To inquire about the program, connect with Jason Bartschy, Director of Financing Programs at jbartschy@toledoport.org
For a complete list of program administrators, please visit the Ohio Department of Development website here.
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wvco.com
Categories: Manufacturing & Distribution, Other Resources
End of July Brings Filing Deadline for Employee Tax Retention Credit (ERTC).
Jun 15, 2023
Don’t leave money on the table!
The Employee Retention Tax Credit (ERTC) is a provision established under the CARES Act which has been enhanced by additional legislation and could provide an immense amount of capital to employers. However, time is running out for business owners to claim what could amount to thousands of dollars in tax refunds.
The ERTC is a refundable tax credit employers can claim against certain quarterly employment taxes, equal to a percentage of qualified wages and health insurance costs paid after March 12, 2020, and before September 30, 2021. For 2020, the credit is 50% of qualified payments, up to $10,000 per employee. Simply put, an eligible business has the potential to request refunds of up to $5,000 per employee for 2020. The benefits are even greater in 2021.
But that means in order to claim the credit for those last three quarters of 2020, business owners need to act now. Tax payers have up to three years to amend their quarterly returns. By amending a return, business owners may unlock substantial benefits to support their business’s growth.
Business Eligibility
For most businesses, eligibility for ERTC for fiscal year 2020 is determined by meeting one of two tests:
- Test 1: A measure of decline in gross receipts. If an employer experiences a significant decline in gross receipts for any calendar quarter, as compared to the same calendar quarter in 2019, they will be eligible for the credit in that quarter. For 2020, this decline is defined as gross receipts that are less than 50% of gross receipts for the same quarter in 2019, and for 2021, this decline is gross receipts being less than 80% of gross receipts for the same quarter in 2019.
- Test 2: A full or partial suspension of operations. If an employer was subject to any full or partial suspension of operations because of government orders related to COVID-19 they could be eligible. These orders could be Federal, State, county, and/or municipality. Even if the business was deemed essential and was not directly affected by such orders, there still could be avenues to be eligible for the credit.
Filing Deadline
Despite the expiration of the tax credit in September 2021, eligible businesses, companies, and employers have the opportunity to submit documentation and retrospectively obtain reimbursements for the Employee Retention Credit in 2023. In order to accomplish this, business owners are required to complete IRS Form 941-X, which serves as a means to rectify any errors in their initially submitted Form 941. However, it is important to note that this process is only applicable within a three-year timeframe from the original filing of their payroll tax returns.
With the number of ERTC scams on the rise, WVC always recommends that businesses consult with their trusted tax professional to ensure eligibility, understand the specific requirements, and navigate the amendment process successfully. Connect with William Vaughan Company’s ERTC team today to see if your business meets the eligibility requirements – by acting now, you just may position your businesses for a brighter financial future.
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Mike Hanf, CPA, CGMA
Tax Partner, ERTC Practice Leader
wvco.com
Categories: Other Resources, Tax Planning
Ohio’s TechCred Program
Mar 19, 2023
Ohio’s TechCred program is a state-backed initiative designed to fuel growth and innovation in the state’s technology industry. Launched in 2019, the program helps Ohioans earn industry-recognized credentials that align with the skills that businesses need. The program is designed to address the skills gap in Ohio’s workforce by upskilling employees and preparing them for the jobs of the future.
Ohio’s TechCred Program gives employers the chance to upskill current and future employees. Employers who submit successful applications will be reimbursed up to $2,000 per credential earned and allows for up to $30,000 per employer, per funding round. Reimbursable costs include those related to tuition, lab fees, manuals, textbooks, and certification fees.
How does the program work?
After determining which new credentials will be most beneficial to the business, the employer must partner with an eligible provider, such as a university or tech school, that offers the appropriate training. Once a provider is selected, the employer is ready to apply for the TechCred program at the Ohio.gov website. Employers must file reimbursement applications within six weeks of each employee completing a credential. For a full list of qualifying credentials and providers, click here.
Who is eligible?
Any Ohio registered employer that employs Ohio resident W-2 employees is eligible to apply. Employers of all sizes and in all industries are encouraged to apply. Only one application will be accepted per employer per application period.
To learn more about Ohio’s TechCred program, visit techcred.ohio.gov or download their program guidelines here.
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wvco.com | 419.891.1040
Categories: Tax Compliance
Claiming Casualty & Theft Losses on Return
Mar 12, 2023
Natural disasters, thefts, and other unexpected events can cause significant financial losses for individuals and businesses. Fortunately, the IRS has provided some relief through tax deductions for designated damages. However, there are specific criteria that must be met in order to claim these deductions along with specifications for reporting them on your return. Here are some of the most common questions and answers to claiming casualty & theft losses on your return.
How do I know if my loss qualifies?
You can only deduct casualty and theft losses if they’re directly the result of an event that’s a federally declared disaster. Meaning, the President of the United States has officially declared the event a disaster. Federal disasters are often declared for areas heavily impacted by hurricanes, tornadoes, or floods. To view all federally declared disasters and related information, visit the IRS website.
There are 3 types of deductible losses allowed under the umbrella of federally declared disasters:
1. Federal casualty loss: The loss of personal use property due to a federally declared disaster. The loss must have occurred in the state receiving the disaster declaration.
2. Disaster loss: The loss of personal use or business property resulting from a federally declared disaster that occurred in a county eligible for public or individual assistance, or both.
3. Qualified disaster loss: The loss of personal use property due to a disaster declared under Section 401 of the Stafford Act, or several specific natural disasters or time periods.
Do theft losses qualify for deductions?
The IRS defines theft as the act of taking or removing property with the intention of depriving the owner of it. The act must also be illegal under state law. But as with the case of a casualty claim, the theft must have occurred due to a presidential disaster area declaration. For example, your city is struck by a tornado and the President declares it a disaster area. Subsequently, a thief accesses your home through a window broken by the storm and steals your car. One could argue the loss of the car was from theft due to a disaster.
Can I deduct a loss covered by insurance?
No, you cannot deduct casualty and theft losses covered by insurance, unless you file a timely claim for reimbursement and you reduce the loss by the amount of any reimbursement or expected reimbursement. For more information, please review IRS Publication 547.
How do I calculate my loss?
Personal casualty and theft losses attributable to a federally declared disaster are subject to the $100 per casualty and 10% of your adjusted gross income (AGI) limitations unless they are attributable to a qualified disaster loss. Personal casualty and theft losses attributable to a qualified disaster loss are not subject to the 10% of the AGI limit and the $100 limit is increased to $500. An exception to the rule above, limiting the personal casualty and theft loss deduction to losses attributable to a federally declared disaster, applies if you have personal casualty gains for the tax year.
What form do I use to claim this deduction?
Casualty and theft losses are first reported and calculated on Form 4684. You will then report them on Form 1040, Schedule A.
Can I itemize this deduction?
For tax years 2018 through 2025, you can no longer claim casualty and theft losses on personal property as itemized deductions, unless your claim is caused by a federally declared disaster.
For tax years 2018 through 2025, personal casualty and theft losses may be deductible when: they are attributable to a federal disaster. For tax years beginning before 2018 and after 2025 personal casualty and theft losses may be deductible even if they are not attributable to a federal disaster.
In conclusion, claiming casualty and theft losses on your tax return can provide some relief for individuals and businesses that have suffered unexpected financial losses. It’s important to remember that only losses directly resulting from federally declared disasters are eligible for deduction. As with any tax-related issue, it’s always best to consult with your WVC tax professional to ensure that you are following the appropriate guidelines and maximizing your deductions.
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Categories: Tax Planning