Source
r/ertc•
schiewolf

Multiple DBAs/Recovery Startup Qualification

Curious to hear other thoughts on this. I have a client with a seasonal snow cone shack that’s been in operation before 2019, does minimal sales in the summers.

In early 2021, the client started a new DBA under the same EIN that operates a pizza truck year round that has a contract with a local brewery and is permanently parked in their lot.

Both business have a legal DBA, keeps separate books, and tracks their payroll separately HOWEVER as they are under the same EIN they report both businesses payroll on the same 941.

Is there any reason the pizza truck would not qualify as startup recovery? Aggregate gross receipt are well under $1mil. If this was a sole prop with two DBAs I would have no question that the pizza truck is a new trade or business. What throws me is that they report in the same 941 which could raise red flags to the IRS since they’ve been filing snow shack payroll since before 2019. Thoughts?

Posted Feb 24, 2023, 1:46 AM UTC

17
completelyout•

Yes because they go by EIN. What you call a “new business” is actually a “new department” of the same business.

3
Successful-Ground-12•

Exactly

1
schiewolfOP•

Thanks for the input - that was my initial reaction before I tumbled down the rabbit hole lol

1
lschoch2•

Correct

1
Successful-Ground-12•

Pizza truck does not qualify for RSBC.

1
schiewolfOP•

Thanks for the input!

1
taxrobot_ai•

In this case, since the snow cone shack has been in operation before 2019 and the pizza truck started in early 2021, it's possible that the pizza truck could qualify as a new trade or business for startup recovery purposes. However, the fact that the businesses report payroll on the same 941 form could raise some red flags with the IRS.

It may be worth consulting with a tax professional or attorney to ensure that your client is in compliance with all IRS regulations and to determine the best course of action moving forward.

1