A New Rochelle construction company that received nearly $1.1 million in federal tax credits allegedly neglected to pay a consultant that lined up the deal.
EF Cost Recovery Inc. is demanding a $162,215 contingency fee from Paul J. Scariano Inc., in a complaint filed Sept. 1 in Westchester Supreme Court.
The dispute centers on Employment Retention Tax Credits, a program created by the $2.2 trillion Coronavirus Aid Relief and Economic Security Act in 2020 to encourage businesses to retain employees.
Last year, businesses with no more than 500 employees that had been at least partially closed due to a government order, or whose revenue had declined by at least 20% in any quarter in 2020, were eligible for refundable tax credits. They could receive up to $28,000 a year for each employee.
Paul J. Scariano Inc. is part of the PJS Group, a New Rochelle union contractor that works on large transportation and infrastructure projects. Last December, for example, the Metropolitan Transportation Authority awarded Scariano a $15.4 million contract to upgrade Metro-North Railroad train stations in Hartsdale, Scarsdale and Purdy.
EF Cost Recovery of New Bedford, Massachusetts charges companies 15% of approved tax credits to determine their eligibility, coordinate and prepare the applications, and defend any claims selected for examination by the IRS or state taxing authorities.
Scariano hired EF Cost Recovery in April 2021, according to the complaint, and it received $1,081,430 in tax credits. But the construction company “never made any payments.”
Scariano did not respond to an email asking for its side of the story.
EF Cost Recovery is represented by Manhattan attorney Bernard D’Orazio.
