The Western Regional Off-Track Betting Corporation is taking on the IRS in tax court over an employee retention tax credit that is worth about $5 million to the corporation.
The Internal Revenue Service's position is that the OTB is a government agency and, therefore, not eligible for the pandemic-era tax credit.
"We are not supported by the government. We don't report to the government," said John Owens, OTB's acting legal counsel. "We've made the argument that there have been other matters in which we've been held not to be an agency, that we're not and that we should be entitled to (the tax credit)."
The board approved a resolution to hire Lippes Mathias LLP, a Buffalo law firm, and the only firm to bid on the project, to represent WROTB in tax court. The agreement authorizes an hourly payment up to $200,000 to handle the case and a $250,000 contingency fee if the firm wins the case.
The credit is available to eligible employers that paid qualified wages to some or all employees after March 12, 2020, and before Jan. 1, 2022.
One of the arguments that Batavia Downs is a business is that the corporation received a PPP loan during the pandemic, which was a program not available to government agencies.
"We were determined to be eligible for that, and that was fully vetted," Owens said. "We had opinions of counsel, and everyone said, yes, we were eligible for the PPP."
