Court filing
Complaint — Alliance Hospice Care, LLC v. United States of America (Dkt. 1, Fed. Cl.)
Summary
A complaint filed October 1, 2024 as Document 1 by Alliance Hospice Care, LLC, through attorney Venar Ayar, against the United States, acting through the Internal Revenue Service, in the U.S. Court of Federal Claims, Case No. 24-1547 T. It invokes jurisdiction under 28 U.S.C. § 1491 and claims a refund of form 941 employment taxes and refundable tax credits related to the Employee Retention Credit created by the CARES Act. The complaint describes employers' obligations to withhold and report FICA taxes on form 941 and how the credit is applied against those taxes, with any excess treated as refundable. It asks for judgment of $71,472.50 plus interest, costs and attorney's fees.
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Filed October 1, 2024 in Alliance Hospice Care, LLC v. United States of America; one of 9 filings from this case.
Record facts
| Court | U.S. Court of Federal Claims |
|---|---|
| Filed | 2024-10-01 |
Cite this document
“Complaint — Alliance Hospice Care, LLC v. United States of America (Dkt. 1, Fed. Cl.).”
U.S. Court of Federal Claims, No. 1:24-cv-01547, Doc. 1, filed 2024-10-01. Archived at Pandemic Darlings, https://pandemicdarlings.com/court-filings/full-docket-united-states-of-america-uscfc-69218642/2024-10-01-gov-uscourts-uscfc-69218642-1-0-doc-1/
, SHA-256 e8bee7e737fa7ef8e73f20666c2d40554ed7e628aa0afbd82bfb66ace623615f.Full text
Case 1:24-cv-01547-EMR Document 1 Filed 10/01/24 Page 1 of 9
Receipt number BUSFCC-9886669
UNITED STATES OF AMERICA
IN THE COURT OF FEDERAL CLAIMS
ALLIANCE HOSPICE CARE, LLC, )
)
Plaintiff, )
) Case No. 24-1547 T
v. )
)
UNITED STATES OF AMERICA, )
)
Defendant. )
/
COMPLAINT
NOW COMES Alliance Hospice Care, LLC (hereinafter “Plaintiff” or
“Alliance Hospice") by and through its attorney, Venar Ayar, and files its
Complaint against Defendant, United States of America (“Defendant” or “United
States”), and alleges as follows:
THE PARTIES
1. Plaintiff is a Massachusetts limited liability company with residence
and principal place of business at 36 Jaconnet Street, Suite 105, Newton,
Massachusetts, 02461.
2. Defendant is the United States of America, acting through its agency,
the Internal Revenue Service (“IRS”).
Case 1:24-cv-01547-EMR Document 1 Filed 10/01/24 Page 2 of 9
3. The Plaintiff has not begun any other lawsuits in state or federal court
dealing with the same or similar facts as this action.
4. A statement required under R.C.F.C. 9(m)(2)(B) is attached hereto as
Exhibit A.
JURISDICTION AND VENUE
5. This Court has jurisdiction pursuant to 28 U.S.C. § 1491.
LEGAL BACKGROUND
Federal Employment Taxes
6. Plaintiff is claiming a refund of form 941 employment taxes and
refundable tax credits related to the Employee Retention Credit.
7. Employers are required by law to withhold federal income taxes and
Federal Insurance Contributions Act (“FICA”) taxes from their employees’ wages,
remit these withholdings, and report them to the IRS on tax form 941.
8. Employers are also responsible for paying FICA taxes and reporting
such taxes to the IRS on tax form 941. 26 U.S.C §§ 3102 and 3111.
9. Employers are usually obligated to file IRS form 941 on a quarterly
basis with the IRS. 26 U.S.C § 6011; 26 C.F.R. § 31.6071 (a) – 1.
The Employee Retention Credit
10. In response to the Coronavirus Pandemic, Congress passed the
Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Pub. L. 116-
Case 1:24-cv-01547-EMR Document 1 Filed 10/01/24 Page 3 of 9
136 (Mar. 27, 2020). Section 2301 of the CARES Act provided a refundable tax
credit called the Employee Retention Credit (“ERC”) to eligible employers on
qualified wages paid to their employees. Pub. L. 116-136, § 2301. The ERC
program was amended and extended under the Consolidated Appropriations Act of
2021, Pub. L. 116-260, § 206 (Dec. 27, 2020), and the American Rescue Plan Act
of 2021, Pub. L. 117-2, § 3134 (Mar. 11, 2021), and terminated under the
Infrastructure, Investment and Jobs Act, Pub. L. 117-58, § 80604, (Nov. 15, 2021).
See also 26 U.S.C. § 3134.
11. A business that is an eligible employer that pays qualified wages after
March 12, 2020, and through December 31, 2021, is entitled to claim the
Employee Retention Credit against its federal employment taxes on the applicable
form 941 tax return for that quarter.
12. Section 2301(b)(3) of the CARES Act states that if the amount of the
credit exceeds the amount of federal employment taxes for any applicable quarter,
then the excess is treated as an overpayment and refunded to the employer.
General Qualifying Requirements
(I) Threshold Requirements
Case 1:24-cv-01547-EMR Document 1 Filed 10/01/24 Page 4 of 9
13. An eligible employer is one that is defined as carrying on a trade or
business during calendar years 2020 and 2021 and, with respect to any calendar
quarter for which the business experienced one of the following:
(a) Its operations were fully or partially suspended due to orders
issued by a governing authority in response to COVID-19 (“Full or Partial
Suspension Test”) that limited commerce, travel, or group meetings or,
(b) The business experienced a significant decline in gross receipts
(“The Gross Receipts Test”) for any calendar quarter of 2020 and/or 2021
compared to the corresponding quarter of 2019. 26 U.S.C. § 3134(c)(2).
(II) Qualified Wages
14. If an eligible employer had not more than 100 average full-time
employees in 2019, wages that were paid to an employee during quarters in 2020
constituted qualified wages. Pub. L. 116-136, § 2301(c)(3)
15. If an eligible employer had not more than 500 average full-time
employees in 2019, wages that were paid to an employee during the quarters in
2021 constituted qualified wages. 26 U.S.C. § 3134(c)(3).
(III) Calculation of Credit
16. For 2020, the employee retention credit is limited to 50% of qualified
wages that an eligible employer pays to an employee in a calendar quarter. Pub. L.
Case 1:24-cv-01547-EMR Document 1 Filed 10/01/24 Page 5 of 9
116-136, § 2301(a). The maximum amount of qualified wages that the credit can
be claimed against is $10,000 per employee for the entire calendar year of 2020. §
2301(b)(1).
17. For 2021, the employee retention credit is limited to 70% of qualified
wages that an eligible employer pays in a calendar quarter. 26 U.S.C. § 3431(a).
The maximum amount of qualified wages that the credit can be claimed against is
$10,000 per employee per quarter in 2021. 26 U.S.C. § 3431(b)(1).
FACTUAL BACKGROUND
18. Plaintiff operates a business of providing palliative and hospice
services to elderly in the State of Massachusetts.
19. Plaintiff had an average of less than 100 full-time employees during
the calendar year 2019.
20. To the extent the Plaintiff applied and received loan forgiveness under
the Paycheck Protection Program, a Shuttered Venue Operators Grant or a grant
from the Restaurant Revitalization Fund, the Plaintiff did not include wages
included on those applications in its calculation of qualified wages in its claim for
the ERC.
21. Plaintiff did not include the wages of any individuals who directly or
indirectly owns more than 50% of Plaintiff or any relatives or spouses of any
Case 1:24-cv-01547-EMR Document 1 Filed 10/01/24 Page 6 of 9
individuals who directly or indirectly own more than 50% of Plaintiff in its
calculations of the ERC.
22. Plaintiff is not a party to any employee leasing arrangement and did
not otherwise lease employees.
23. Plaintiff is not a part of an affiliated service group within the meaning
contained in 26 U.S.C. § 414(m).
24. Plaintiff is not a member of a consolidated group of corporations and
is not under common control with any other trades or businesses.
COUNT I
Plaintiff Refund Claim on 941-X for Fourth Quarter 2020
25. On July 9, 2023, Plaintiff signed an amended IRS Form 941-X for the
taxable period ending December 31, 2020, claiming a refund of tax and an ERC in
the amount of $27,890.50 plus interest. Attached hereto as Exhibit B.
26. The return was mailed to the Internal Revenue Service Cincinnati
Service Center on July 10, 2023. Proof of mailing is attached hereto as Exhibit C.
27. The IRS Account Transcripts confirm the receipt of the claim on July
14, 2023, and reflects a forwarded for processing date of July 14, 2023. A true and
correct copy of the Account Transcript for fourth quarter 2020 is attached hereto as
Exhibit D.
Case 1:24-cv-01547-EMR Document 1 Filed 10/01/24 Page 7 of 9
28. More than six months have elapsed since the Plaintiff’s claim was
filed with the IRS.
29. There is currently no outstanding balance owed from the Plaintiff for
fourth quarter 2020.
30. Plaintiff qualified itself as an eligible employer for this quarter under
the Gross Receipts Test.
31. Plaintiff had gross receipts on or about $102,096.27 for fourth quarter
2019.
32. Plaintiff had gross receipts on or about $25,216.91 for fourth quarter
2020.
33. Plaintiff had about a 75.3% decrease in gross receipts from fourth
quarter 2019 to fourth quarter 2020.
34. Defendant has not rejected or accepted the Plaintiff’s claim for a
refund for fourth quarter 2020.
35. Plaintiff paid qualifying wages of $55,781 in fourth quarter 2020 and
calculated an ERC of $27,890.50 for fourth quarter 2020.
Case 1:24-cv-01547-EMR Document 1 Filed 10/01/24 Page 8 of 9
COUNT II
Plaintiff Refund Claim on 941-X for First Quarter 2021
36. On July 9, 2023, Plaintiff signed an amended IRS Form 941-X for the
taxable period ending March 31, 2021, claiming a refund of tax and an ERC in the
amount of $43,582 plus interest. Attached hereto as Exhibit E.
37. The return was mailed to the Internal Revenue Service Cincinnati
Service Center on July 10, 2023. Proof of mailing is attached hereto as Exhibit F.
38. The IRS Account Transcripts confirm the receipt of the claim on July
14, 2023, and reflects a forwarded for processing date of July 14, 2023. A true and
correct copy of the Account Transcript for first quarter 2021 is attached hereto as
Exhibit G.
39. More than six months have elapsed since the Plaintiff’s claim was
filed with the IRS.
40. There is currently no outstanding balance owed from the Plaintiff for
first quarter 2021.
41. Plaintiff qualified itself as an eligible employer for this quarter under
the Gross Receipts Test.
42. Plaintiff made an election under 26 U.S.C. § 3134(c)(2)(B) to use the
immediately preceding calendar quarter to qualify under the Gross Receipts Test.
Case 1:24-cv-01547-EMR Document 1 Filed 10/01/24 Page 9 of 9
43. Plaintiff had gross receipts on or about $102,096.27 for fourth quarter
2019.
44. Plaintiff had gross receipts on or about $25,216.91 for fourth quarter
2020.
45. Plaintiff had about a 75.3% decrease in gross receipts from fourth
quarter 2019 to fourth quarter 2020.
46. Defendant has not rejected or accepted the Plaintiff’s claim for a
refund for first quarter 2021.
47. Plaintiff paid qualifying wages of $62,260 in first quarter 2021 and
calculated an ERC of $43,582 for first quarter 2021.
WHEREFORE, Plaintiff prays that this Honorable Court award judgment in
favor of Plaintiff and against Defendant in the amount of $71,472.50 plus interest,
costs and attorney’s fees, and grant any further relief this Court may find
appropriate.
Respectfully Submitted,
Dated: October 1, 2024
By: /s/ Venar Ayar
Venar Ayar
Counsel for Plaintiff
30095 Northwestern Hwy, Ste. 102
Farmington Hills, MI 48334
(248) 262-3400
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