ERC Credit when selling business

[Franck]

A client, owner of a local restaurant, applied for ERC credit through his payroll service provider.  Estimated credit is $71,600.  After application for ERC credit, client received unsolicited offer inviting him to sell his business.  I was ready to amend the business 2020 returns to adjust for the amount of credit.
Question: Assuming credit arrives after sale of business, who get it?  The old owner or the new owner?  I'm unable to find anything addressing this question.  Any suggestions?  Thx

[IRonMaN]

The original business gets the credit if it comes.  So if your client sold assets, he will get it.  If he sold stock, the new guy gets it.

[sjrcpa]

And it would be wise to specify this in the sale agreement.

[qbteachmt]

It's just a different asset, as a receivable. The assets and liabilities are part of the negotiation for the sale.

[IP]

We bought a business last year.  As part of the transaction seller would pay for his taxes.  Fast forward to 2023.  It was a stock sale.  The old owner received emails asking him if he wanted to apply for ERC. He no longer owns the company.  Now he wants to sue us. The EIN didnt change, it was business as usual after the business was sold.

[sjrcpa]

What does he want to sue for?

Are you/did you apply for ERC after the purchase? Maybe seller is entitled to some of it, net of the additional tax due after emending returns. Maybe not.

I assume you are consulting your attorney.

[IP]

He wants to sue for the ERC refund.  He said it belongs to him as he owned the company back then. But it was a stock sale, he took out all the money he could out of the company before it was sold.  We did research and it shows that since the EIC remained unchanged it is business as usual. Only thing that changed was the owner's name.  He claims is his money. We want to use the money to buy new equipment as basically what he sold us was junk.

[IP]

We did speak to our attorney and she also said he is not entitled to anything after business sold.  

[sjrcpa]

Seller didn't have very good advisors. The tax clause should have addressed tax refunds (and adjustments/balances due) applicable to presale periods.

Not your problem.

[qbteachmt]

"He said it belongs to him"

Anything associated with the business is still with the business, if this was an entity sale. The same condition happens often, such as worker comp rebates in my State. The business pays premiums and two years later, after an audit, there is either more owed or there is a rebate. You can't go back to change history.

@IP 

You seem to be lost on the internet.

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Thanks.