As 2022 quickly comes to an end, many small businesses are still attempting to recover from the economic disaster the COVID-19 pandemic left behind. Not all is bleak and hopeless for 2023, though. The IRS’s Employee Retention Tax Credit is just what you need to start the next year on a high note.
In this week’s episode, Grace and Liel sit down for a conversation with Michael Blom from the Lake Law Firm, who shares a comprehensive guide on how business owners can claim their ERTC and reinvest the money in their business. The deadline to apply is fast approaching, however.
If you are a business owner and qualify for the Employee Retention Tax Credit, what better expert than a lawyer with years of experience who will help you get the maximum recovery amount and reinvest the credit back into your business? Call The Lake Law Firm at (888) 987-9071 for a free consultation.
Resources mentioned in our episode:
- COVID-19-Related Employee Retention Credits: General Information
- Claim your Employee Retention Tax Credit with The Lake Law Firm
- Michael Blom’s LinkedIn profile
Let us know that you enjoy the show by subscribing and leaving us a review! Don’t forget to send us your questions and comments at ask@incamerapodcast.com.
Transcript
Liel: [00:00:00] The employee is retention credit, also known as RTC under the CARES Act, encourages businesses that have been financially impacted by COVID-19 to keep employees on their payroll. Businesses, including law firms, can do a look back on their payroll during the pandemic and retroactively claim the credit by filing an amended tax return. I’m Liel Levy, co-founder of Nanato Media and author of Beyond Se Habla Español How Lawyers Win the Hispanic Market. And this is in Camera podcast, where we know that law firms should apply for ERTC. Welcome to In Camera Podcast, Private Legal Marketing Conversations. Grace. So nice to see you. Welcome back.
Grace: [00:01:11] Thanks, Liel. How are you today?
Liel: [00:01:13] I’m doing great. Grace, it’s really nice to see you. It’s the first time that we actually talk since. Thanks. Well, since before Thanksgiving. But, you know, it’s just that time of the year, right, that we were already into the holiday period. So I hope you had a great holiday.
Grace: [00:01:27] I sure did. I hope you did as well.
Liel: [00:01:30] Yes, I certainly did, Grace. And, you know, thrilled that it’s December. And when I say thrilled is kind of like I really don’t know how to feel about the speed in which this year just flew by us. I mean, this is just crazy. I don’t I don’t think I’ve ever felt a year ago and by so quickly and I’ll take that as a good sign, right. It means that a lot of good things have happened. Time was, you know, well used. And let’s just hope that 2023 is an even better year. But, Grace, before we head into all of that, because this is actually a great conversation, the one we’re having today about getting ready for the next year, strategizing for your law firm and for your business. And so I will let you go ahead and introduce one of our favorite guests here in this show, who’s a big friend and a real, real resource for legal information and business planning, I would say. So go ahead, introduce so we can jump right into the conversation.
Grace: [00:02:27] So, ladies and gentlemen, we have a fantastic person today who is a become a friend of mine as well. And you’ve heard him on the podcast before. He’s a partner at the Lake Law Firm, and that is Michael Blom as a partner at the lake law firm Michael Bloom have focuses on personal injury, pharmaceutical drug injury, medical device liability and mass tort litigations. Litigations Mr. Bloom has worked on include Philips, CPAP, Paraquat, baby formula, and e c l Miron amongst quite a few others. He has also worked with attorneys nationwide en mass tort case acquisition and co counseling services. In addition to that, as Liel was mentioning, he has worked with business owners to recover refundable tax credits through the employee Retention Tax credit program. He’s received the National Trial Lawyers Top 40 under 40 Civil Plaintiff Recognition for 2018, 2019, 20, 20, 2021 and 2022. Ladies and gentlemen, he’s one of the rising stars, as you can see. He’s also admitted to the New York State Bar, Third Department, US District Court for Southern and Eastern District of New York and the US Court of Appeals for the Second Circuit. Michael, thank you so much for joining us and welcome to In Camera Podcast.
Michael: [00:03:39] Thanks so much for having me. Grace and Liel, Looking forward to it.
Liel: [00:03:43] It’s a real pleasure to have you here, Michael. And as I was just saying right before we heard your very impressive bio is that there is a topic, right, that right now is or should be top of mind on all business owners, and that is the potential to qualify for an employee retention credit. And so a few months ago, Michael, you were here and you very, very briefly touched over the surface on this topic. And we would like to dive in more into it on this conversation, but not just only learn about it. Also understand why is it important to take action and how is it that you and the law firm can help business owners. And it’s important that we define here. That is both goals, if I understand correctly, for law firms and other types of businesses to leverage this incentive. So, Michael, take us away. Explain, first of all, what is this tax credit? How does it work? When did it originated? Just give us a good background information on it.
Michael: [00:04:54] Sure. So the employee retention tax credits are refundable tax credit against certain employee wages that an employer makes between a certain time period. So the time period is March 12th, 2023, September 30th, 2021. So that’s quarter two 2020 through quarter three, 2021 at six total quarters. It was a credit authorized as part of the CARES Act to encourage companies to keep their employees on the payroll during the pandemic. So with that, there’s two different types of credit amounts. I would say in 2020, you can qualify for up to $5,000 per full time W-2 employee. And in 2021, there’s three different quarters that you can qualify for up to $7,000 per quarter in each of those three. So 21,000 overall, you can qualify for up to 26,000 per full time W-2 employees through this employee retention tax credit.
Liel: [00:05:54] So it sounds here like the qualifiers are that anyone that has been an employee at your law firm or your business prior to pandemic and there is still an employee nowadays or up until the date that you’ve mentioned, right, that could be second quarter 2021 that can make you eligible for a tax credit. Now, the first question that comes to mind from my end is like, what happens if that person did work indeed, throughout the pandemic in your business and then some maybe another couple of quarters in into 2021, are you still eligible for that tax credit if that person in present times is no longer part of your organization?
Michael: [00:06:39] That’s right. So it’s calculated based on 2019. So if they were with the company in 2019, it’s matched against 2020. Did you retain that employee in 2020? You know, in those three quarters were one of those quarters that you can claim up to 5000. And then did you retain that employee in the three quarters of 2021? They don’t have to be employed through all those quarters. It would just be pro rata basically on the quarters that you would qualify for. And if they’re no longer with the company, you can still qualify that employee as long as they were employed during some point of those six quarters. That’s correct.
Grace: [00:07:21] Basically what is being said here is that those that qualify, it’s it’s the individuals that you kept because of the pandemic and you still kept them during that time frame that you’re stating. And so, you know, it could be anybody that had full time W-2 employees during those periods. I did want to ask, Michael, can you give us a little bit more information on the the sense of urgency that there is behind this? Right. Because you said the first quarter, the 2021, is going to expire soon, right, in June. So to get the most credit you possibly can, shouldn’t they, you know, within the next month or two file or as soon as possible, how will that affect that? Basically.
Michael: [00:08:06] We recommend our clients to file as soon as possible. That’s right. There is a three year statute of limitation. So the first one that’s coming up is in 2023, in the middle of that, and then they expire every three months thereafter for the other quarters. But of course, IRS regulations and things can change. So we would encourage employers to apply for this immediately so they can get the maximum credit, which. Is available right now. And while there’s been a large fund allocated to this and that continues to decrease. So the idea is to submit the claim while the fund still has all of the monies there before there may need to be some type of adjustment within the government to fund even more depending on the number of claims that are submitted.
Liel: [00:08:58] Great that you were pointing that out. Good question, Grace, because basically your eligible potential grant or recovery, what what’s the right name of calling to this? I mean, it’s a credit, but it’s a credit. But will the government ever come back to you and say, hey, it’s time to pay back? Or is this comparable to the payroll protection program which was for a given to most of businesses? What’s the best way to see or regard this credit?
Michael: [00:09:28] Yes, it is called a credit, but it’s not it’s not truly a credit that you get on your taxes. It’s a check that the IRS then mails the business and they can cash that check and use it for whatever they want. That does not have to be paid back. And even companies that took out draw one or drill two of pop can still qualify as just reduced for those quarters that they took out the. There is always a audit risk with the IRS. So they of course, look at higher submissions versus lower ones that are made through the ERTC with more scrutiny. They can come back and do a desktop audit is the first type where we would and we represent clients for free with this audit protection we call it. So there’s no charge to them, and that would be to submit all of the calculations, how we came across to those numbers and submit that to the IRS. Usually the that resolves the audit if it goes to a full audit. We also do that with attorneys at no cost. That chance is very low. I’m told it’s under 1 to 2% total for an audit. And yes, if you do have to send money back, the. The company would have to send that back. And we also reduce our attorney’s fee pro rata for any amount that needs to be sent back. But we haven’t had that come up.
Liel: [00:10:51] With that being said, you’re talking here attorney fees and such. So let’s get into that. Why would a business would or should consider or planning on getting any of these credit back? Why should they consider doing it through a law firm like yours?
Michael: [00:11:05] There’s a couple of different reasons. So, number one, it’s a tax deductible contingency fee that we only take at the end after the business owner has received the check from the IRS and cashed it. We then invoice them, which is great because with accounting firms and other payroll companies, they usually require a substantial fee up front and you don’t get that back based on what type of refund you may get back from the IRS. Also, complete audit protection. You would have to pay for that separately from payroll companies and accounting firms. And then also the really the main one is how as a law firm, we can qualify to get the maximum recovery for all six quarters. So there’s been a lot of talk in the space that CPAs and accounting firms, payroll companies, they haven’t notified their clients of this ERTC program that it exists or if it does exist, they tell their client that they don’t qualify when in fact they can qualify or they may try and qualify them and they don’t obtain the maximum amount. And that’s for a number of different reasons. One is that they’re relying primarily on a straight line revenue drop test. So if your revenue dropped 50% or more in 2020 as compared to a quarter in 2019, you can qualify for that credit under that revenue drop test.
Michael: [00:12:33] 2021 is a 20% drop as compared to 2019. Most businesses, many businesses had increased revenue during the pandemic for a variety of different reasons, so they actually wouldn’t qualify for all of the quarters or most of the quarter’s. So it would be a very little recovery. That’s what accounting firms and payroll companies are primarily relying on. The other way to qualify for this credit is through the governmental mandate test, which is if the business was affected at a local, state or federal level in a more than nominal way. And you can tie that back to the businesses activities in their six quarters, you can also qualify. And that’s where we come in as a law firm that we’re able to look at these issues, perform a legal analysis. Once we do an in-depth 45 minute interview with the client to make those arguments, why the business was affected with those mandates, how their activities and business. Was was really taken aback by the pandemic and they weren’t able to perform in the same way that they were able to, but for the whole pandemic. So And there’s mandates, of course.
Liel: [00:13:47] So, Michael, just confirming here what I’m what I’m hearing you say. The qualifiers, at least from an accounting standpoint, are pretty black and white. If you generated more money during the pandemic than you did in prior years, you’re disqualified. You’re done. But you’re bringing up the criteria here by looking at, well, it’s not just the money, but there could have been other types of impacts that interfered with your way of running your business. And we would be looking into that. Now, I know some people here are listening to this. They might be a little bit sceptical about all of this and think, Well, I don’t, I don’t think I can. We did ended up turning a higher revenue the couple of years after the pandemic and I just don’t see how this could potentially be applicable to me. Would you still encourage them to to reach out and have a conversation with your team?
Michael: [00:14:43] Yes, it’s completely risk free and no fee. So we we perform the whole consultation at no cost and let them know if they likely qualify at the onset before engaging the client. Once they get the retainer agreement, we go over any questions they may have. And then, of course, after that time, an interview is scheduled with the business owner to go through how their business may be affected by these mandates. And there are several ways that you can tie back the mandate that may have limited the number of people in the room, may have limited the operating hours, may have limited various things that you can tie back to those mandates during those different quarters.
Liel: [00:15:26] That’s really, really interesting. And I, you know, without asking you here to actually violate your attorney client confidentiality privileges here, would you be able to tell us about some of the maybe maybe one or two success stories that you’ve had in helping? I think Law Firm is the best example here to use for recovering some or all of the credit that was available to them.
Michael: [00:15:56] Yeah, I mean, with law firms in particular were very successful in claiming these credits. Many of the courts across the country were shut down. So right there, I mean, that’s that’s at the local the state level that they were shut down. You couldn’t go to court. You had to rely on a completely different way to resolve your cases settlement wise. Those settlements could have been pushed out. They may have been accelerated. It’s a very varied scenario of what can happen. Of course, you couldn’t go to trial, so you couldn’t get recoveries and judgments on on those types of that you would have been able to get. But for the courts being shut down also on not having a number of people in the office. A bunch of states had reductions on how many people you could have in a room or how long you could be open. Also delayed or cancelled projects that you may have had at the law firm or inability to attend networking events. A lot of these conferences were shut down across the country because of local and state mandates that you weren’t able to network and do business in the same way that you were able to before these mandates were put in place.
Grace: [00:17:12] I want to explore just a little bit more about the qualifiers, because I think that what we offer in terms of contingency, what we offer in terms of the qualifiers that we know we can kind of dig deep into what their problems were. And like you said, a law firm in particular could benefit from what we can provide as the law firm for this particular tax credit, because not only are we a law firm, it’s contingency, but also we can look at the things at the local and state level. With that being said, I’ve heard multiple times, Are you sure about that? Because like the PCP loan, I mean, I got tons of money or I got enough and I was fine or this, that or the other. Right? When it comes to the BP loan, there’s no way I’m eligible. I made more money and I got the BP loan. I’ve actually heard that very specifically. And this is someone I know said that to me. So, you know, what kind of information can you give someone that says that, right, that they’re saying, hey, this I got BP loan and I made more money, What am I supposed to do? I there’s no way I’m going to qualify. And I know it’s a little bit of a same question as what Liel was asking, but just slightly different and specifically about the BP stuff, because that’s where I’ve heard the most rebuttals.
Michael: [00:18:29] I would say let’s take a look. You know, in the six quarters, you may have, you know, might not be able to use the straight line revenue drop test, but you can also use the governmental mandate test to qualify for those quarters and the quarters where you took out PGP and draw one or two in 2020 and 2021. That’s just a reduction in the overall word that you get from the IRS. And what we’re seeing is you might not get the 26,000 max per full time employee, but you’re likely going to get somewhere around 16,000. Once those monies have been taken out, which is still substantial when you multiply it out for your whole staff.
Liel: [00:19:07] Michael, I want to ask you a little bit about the the money side of things. Does the salary of the employee. Their earnings as a W-2 employee have anything to do in establishing how much you are eligible to receive per employee? Or is it standard no matter whether they’re an employee that earns five digit salary or they’re earning minimum wage per se?
Michael: [00:19:37] Yeah. So it depends on how much in qualified wages those employees were paid in those quarters. So for example, in 2021, the program increased to 70% of up to $10,000 in qualified wages per employee per quarter and in the first, second and third quarters. So as long as you paid your employer more than 10,000 and qualified wages and health insurance benefits, then you get 70% of that 10,000, which is 7000 for each of those up to. So if you paid them less than $10,000 in wages in those quarters, then of course you’d get 70% of that less than amount. And in 2020 it’s 5000. So as long as you paid them 5000 and qualified wages or more, then you can claim the $5,000 in quarter two, three or four. It’s only a one time $5,000 credit in 2020 and it’s of no, sorry, it’s $10,000 of qualified wages and then you get 50%. That’s what the IRS is going to provide a credit on. That’s where you get the 5000. It goes from 50% of 10,000 in 2020 to 70% of 10,000 in 2021.
Liel: [00:20:58] Is it the same if you have W-2 part time employees, as long as you are hitting those amounts, you can claim a credit or they have to be full time employees. They have to be working 40 hours a week.
Michael: [00:21:14] So it’s called a full time equivalency test, which is 30 or more hours per week as a full time W-2 employee. So you can add up all of the hours that people work. Divide that by the number of employees and then come up with a it’s good. It’s on average what you know, how many employees you have over that 30, 30 hour per week threshold. And and other to two important notes, it needs to be 500 or less W-2 employees that are full time in 2021 and under 100 or less full time W-2 employees in 2020 to claim those two different credits. And it’s all businesses that can apply, including 500 13c nonprofit organizations.
Liel: [00:22:08] Michael, how long does it take this process? Like from the moment that somebody reaches out to you, you have the consultation, Things do look like they have potential. What can you walk us down a little bit to the process and what is the timeline that one should expect to going through this cycle?
Michael: [00:22:28] The most difficult part is the initial document collection. Just getting the financial documents, which include the 940 ones from 2019 through 2021. Profit and loss statements, the PGP applications, things like that uploaded into a portal. But once we have that from the business owner or the business and we work outside the business owner, maybe their accounting department that gets us that information. Once we have that, it’s a fairly quick turnaround between 2 to 4 weeks to work up the claim, have everything reviewed submitted to the IRS, and then it’s waiting from the IRS. Usually between 3 to 8 months can go up to 12 or more that we’re seeing. But in the 3 to 8 range now, there’s really no telling. You know, businesses that submitted their claims a year ago, some are still waiting on those credits. Some that recently submitted their applications have already received those credits. So it just depends. It’s a large backlog at the IRS, but they are working through the claims.
Grace: [00:23:33] I do kind of want to add to that because from our side, the process could be as quick as a couple of weeks or it could take as long as you know, as long as it takes you to get us the documents that we require to file with the IRS. So the sooner that you file, the sooner that you provide us rather the documents that we need for the analysis and we’re able to process the claim, the quicker that you are in queue to get the money right. Just like Michael was saying previous, though, the higher disbursements will of course be looked at potentially more in depth or a little more in a little more, take a little more time because it’s a larger disbursement. But that’s just kind of the way the IRS works, as we all know. But with that being said, the quicker that you sign a retainer, the quicker that you can get the documents over to us and we process it, the faster that you get into queue to get the monies. And as Michael was mentioning, sometimes it could be as quickly as within a month, Right, with the IRS. It just depends. But they are processing it and they’ve definitely stepped up, I’ve noticed, on the processing because I’ve seen some claims just getting processed pretty quickly. No rhyme or reason that I’ve seen so far. But, you know, other than the kind of caveats I was mentioning, which is, you know, larger disbursements or something with not like very specific items that you can tell easily, like he was saying, straight line revenue drop versus maybe a more of a legal analysis on it. So I did want to mention that because I think it’s important that people realize that the quicker they can get documents over, it’s same with your taxes, right? But the quicker you can get documents over, the quicker you can get in line to get your check.
Liel: [00:25:13] Grace. As I know Michael’s been mentioning here a few of the documents that are likely to be needed in order to process the claim. But, you know, just to clear out any doubts about how hard are these documents to get or to sort out or to put together. Can you just name or list the most common documents that are going to be needed to to file this? Because I’m assuming this should be pretty readily available for most business owners.
Grace: [00:25:38] Yes, that’s such a good point. Thank you for bringing that up, Liel, because as I’m saying, you need to have these documents, you need to submit them. It’s always a concern.
Liel: [00:25:46] It’s a pain in the neck. It’s the last thing anyone wants to hear, right? Is like sort of documentation.
Grace: [00:25:51] It’s such an it is a pain, right, for most people. But this is such a straight forward process in terms of the documents that are required that your bookkeeper or your accountant or you should have it in your payroll system and it’s fairly easy to get a hold of. So the document that you need is the form 941. Is that correct, Michael? I believe so. Is the form. 941 Yes. So form 941, which is your payroll document that you have to file regardless. So it’s one of those things that you should have as long as your books are clean and straight, which I’d say most of us business owners have that stuff already done and filed. So as long as you’ve got that documentation, that’s the main document that you need. The rest we help you with anyway, right? When it comes to statements or if you have a loan that you did, I would make sure you have those documents which you had to put all those documents together anyway to get the loan. So this is really just that form 941 in particular. If you have that, that will get us started almost right away. The rest of it is fairly simple to get a hold of. Like I said, it’s more like statements and checking and reviewing and all of that. But that that payroll document, that Form 941 will definitely get you started and almost done within a couple of weeks because once you have it, we’re good to go.
Liel: [00:27:13] Great. That’s you know I guess music to everyone’s hears because the last thing you want to do especially coming from a place where we talk so much about mass torts and such, where, you know, the collection of paperwork and evidence is that it’s such a nightmare that it’s up to a certain extent a relief to hear that for this particular process is actually not complex at all. Now, Michael, before we move into takeaways, I just want to ask you one more time, You did mention the very, very slight risk to an audit that may exist, that may put into question your claim to the credit. But aside of that, are there any other downsides, downsides to moving forward with this claim? Because I know a lot of people, you know, are potentially thinking, well, you know what? At the end of the day, we did get a BPP loan and quite frankly, we did not really need it. And so, you know, we we were able to keep the money and fine. But I feel that going after another credit would be kind of like stretching things out. Is there really a risk in doing this or is this an opportunity that that business owner should leverage in the same way that other bigger corporations leverage other tax incentives that the government puts in front of them in order to grow and bring shareholder value?
Michael: [00:28:45] Yeah, it was. It’s an opportunity for the business owner to recover, for keeping their employees on during the pandemic and to recover those monies that they lost during that time for keeping their. It was a very difficult time. It still is. But in particular, those two years where this credit qualifies for. And that’s that’s what the IRS wants businesses to do. They’ve allocated a giant fund. As long as you submit the correct documentation, you get the monies. It’s all based on calculations and they encourage businesses to apply for it because they deserve that money back.
Grace: [00:29:23] So I did want to ask you a little bit about referrals, Michael. You know what? If I know somebody that needs this? I’m not a business owner, but I know another business owner. How would I get a hold of you? Like, should I still contact you? Tell me a little bit about referrals, please.
Michael: [00:29:40] Yes. Attorney referrals are great all the time. We also do non attorney referrals in certain circumstances, so I would encourage anyone listening. If you have business owners, I encourage you to reach out to them, see if they’ve applied for this credit yet if they’re interested. If they are, you can put them in touch with that with us and we can explore those opportunities. Also, for the attorneys listening, a lot of your clients, former clients and also leads are business owners in your own database. So you can reach out to those strategically through different forms of communication and see if they’ve applied to and put us in touch with those business owners. And we can discuss those opportunities, referring cases to us as well.
Liel: [00:30:28] Right. That’s such a good point, Grace, because as you know, we’ve mentioned also during the opening, while obviously one of the industries in which you have developed a big strength and expertise is going to be the legal industry, there is basically the same rules apply for every other business. So there is a big opportunity here for you also to to help maybe even your clients, right? If your clients happen to be business owners and such, this is a great service that you can do for them to help them become aware about this opportunity and give them access to it. So really great point. And we then obviously will make sure that we have here both Michael contact details and the law firm contact details so that it’s easy for you to initiate your consultation with them and establish this partnership. So you’ve been a guest in this podcast before, Michael, and you know that we really, really like to wrap things up with actionable takeaways, right? And while this conversation has one that is very clear and specific, let’s look into some of the reasons. Why would it make sense to consider in moving forward with an application for employee retention credit at this point at the end of 2022?
Michael: [00:31:51] I would say taking into account that things can change in the future with the government, the IRS fund, that they may have to obtain additional funding on the number of claims that are submitted over the next month and year plus. The time would be now to have your claim reviewed and submitted to the IRS. And so you can also reinvest that money into your business. The longer that you wait, you’re not able to use that money and reinvest to your business to grow it even further.
Liel: [00:32:23] That’s such a good point. The one that you’re making there. And Grace, I know you were going to say something in here, so.
Grace: [00:32:29] No, I mean, I’m nodding. I know you can’t hear me or see me nodding on the podcast, but yes, I’m nodding because, you know, the point is, the quicker that you file, the quicker the money is going to get to you, the quicker you’re in the queue and the quicker you can actually grow your firm or business by using the money. Right. And reinvesting it.
Liel: [00:32:49] If you were eligible to.
Grace: [00:32:50] It, yes, you’re eligible.
Liel: [00:32:51] This money is not generating correct. You’re not generating any interest by having this money sitting there in the IRS found. Right. Until until you don’t get it. You don’t get it and you cannot use it like you could actually put this money to work for your for your law firm, the sooner you get your hands on it. And from what Michael is saying here, I mean, it’s not these amounts are not likely to increase. If anything, it’s going to decrease your window of getting the maximum available credit is actually narrowing down. And already in the first quarter of next year, the first quarter of credit is going to be out of the question. So I 100% see a lot of value in moving forward with it. Now. Now, Grace, you know, what are some good uses that people who actually get this credit should should consider doing with this money? Right. Because for for many for a lot of people that have not really been counting on this or from the sudden, you know, depending on how many employees they have, this is this is a considerable amount of money providing, you know, that several of their team members have been around and maybe are still around since before COVID 19.
Grace: [00:34:07] So I actually I was asked that by a law firm that we were working with on this. And my suggestion was reinvest in your firm and including marketing. Right? So if you’ve always wanted to get into mass torts, this is the money to do that with because you were not expecting it, right? You weren’t. This is not this is almost found money right at this point because, again, it’s not something that you had on your balance sheet. As I need to make this money, I need to get this money, I need to use it for X. It’s not allocated at the moment. So unless you already know that this is coming down the pipe and you already have it allocated, I would suggest reinvesting in your firm to use this money to buy mass towards or open up a practice area that you have always been interested in, or even more marketing in terms of pay per click and other things that you can invest if you wanted to. You’ve always tried to get into the Spanish legal marketing, you know, give Liel a call. Like those are the things that I believe you need to do with the money that you weren’t expecting in particular. And of course I’m going to say get mass torts from us because that’s what I think you should do when you have money that you’re not expecting and you can afford to lose, basically. Right? I mean, we don’t go into investments expecting we’re going to lose, but you have to have that in the back of your mind. So. That’s why when I tell people when you want to invest in Mars torts. Under the expectation, of course, knowing what we know about mass torts and what we’ve talked about here. Reinvest in your company, reinvest in your firm, and reinvest using the money for marketing, whether it’s mass torts or something else.
Liel: [00:35:45] Yeah, totally. And even in mass torts, it’s great, as you were saying, right, there are mass torts that are very solid and seem very likely to be good returns on investments, but there is always going to be wildcards when it comes down to mass torts, and those ones can actually be a terrific return on investment, but they also account for a higher risk. And so just like with any other type of investment that you’re doing, you should just play it safe in a from a standpoint that part of your money goes for investments that are pretty solid, have a good track record and seem to be on the right track to generate you predictable return on investment, right, Whatever that means. And then a part of it or a portion of it, you’re going to put it into something that your intuition is just telling you. This is something that I feel it’s worth investing and I want to give it a try, even though I know it’s a bigger gamble to take. And so I think obviously having off from the sudden amount of money that you can that you can actually use for these sort of investments puts you in a very privileged position of being able to further diversify your your sources of revenue. Now, Michael, I do want to ask you right, because one thing that you’ve made it very clear throughout the conversation is that even though it’s called a credit, it’s not a credit, it’s a check that you get, but it is from the IRAs. So will you have to pay taxes on this on this extra payment that you are getting from the government?
Michael: [00:37:12] That’s correct. It is taxable. And we recommend to our clients and potential clients as well to reach out to their tax advisors to discuss that as a separate conversation.
Liel: [00:37:23] Yeah, I think that’s super important to take that into consideration. Right, Because obviously, you know, this could mean increase in your revenues for for the year. So that’s another reason why you may want to do it. Now, Maybe maybe this year is the right time to actually get it. I don’t know if there is enough time. Michael, from what Grace is saying here, is sometimes it can take less than a month, sometimes it can go for a little bit longer. But hey, the sooner you you take action, the more benefit you’re going to have with regards or control you’re going to have about making that decision. When when does it make sense to you to actually get this money? And if if anyway, it’s early 2023, then great, this is the time to take action for it to actually get the money in early 2023 and put that money to work throughout the year. So you get the most out of it. Michael, what can I say? So great to have you here. Really, really great insights. You know, I think it’s right in this month where people are really looking back, taking record of everything that’s been happening in this year and starting to plan for the next one. And I think it makes so much sense to consider these opportunities that are starting to become more scarce and also where you’re going to be limiting the eligibility to get a maximum credit. So thank you so much for reminding us about this opportunity. So we hope to get you back here sometime soon so we can have other conversations, particularly there is so much to talk about mass torts that would love to have your input and insights on what’s been going on there.
Michael: [00:39:05] Thanks so much for having me. I really.
Liel: [00:39:06] Appreciate it. Thank you. I hope we get to see you again soon and stay safe until then.
Grace: [00:39:12] Thank you, Michael.
Liel: [00:39:13] Thanks for. If you like our show, make sure you subscribe. Tell your co-workers. Leave us a review and send us your questions at: ask@incamerapodcast.com. We’ll see you next week.
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