Tell him to ‘create’ a ‘new’ company, split the workers between his old and new companies and continue as before................
“Tell him to ‘create’ a ‘new’ company, split the workers between his old and new companies and continue as before................”
My son says he is seeing this in small industries related to the high tech business, especially start-ups that need more than 50 workers to operate.
I think they are well on to that scheme.
The next thing I hear they are going to be doing is to attack S corps. They hate independence and they want that monthly tax revenue instead of “just” the quarterly payments.
Your suggestion has been looked at but unique among lawyers there is little dis agreement that IRS would, at the end of the day, prevail in a fight if he were to pursue such a course of action.
The government would claim “same beneficiary” and “sham transaction” and same “altar ego” running the two companies. And, they would claim that his two companies were nothing more than a “device” to circumvent Obamacare.
In his case, he runs on about a 2-3% NOI and simply cannot afford to risk all taking on the IRS and the Federal Government as it is currently constituted.
No, don’t tell him to do that. Good chance he’ll eventually get busted, be declared a joint employer, and the taxes and penalties will wipe him out.