Case Study:

Client Background:

 

A client operating a security services business through six S-Corporations and one LLC, with combined gross receipts exceeding $2 million annually, approached New Beginning Financial Group, LLC (NBFG) in urgent need of financial rescue. They faced federal and state tax liabilities, had not filed business or personal taxes in recent years, and lacked internal accounting systems and documentation for partners and vendors.

 

Key Challenges:

​

• Outstanding federal income tax and sales & use tax liabilities.

• Multiple years of unfiled personal and business tax returns.

• Failure to issue K-1s to business partners.

• No 1099s issued to vendors.

• Business expenses not being utilized for tax deductions.

• Lack of payroll system, budgeting structure, and financial management across multiple entities.

• Unorganized multiple business bank and credit accounts.

 

Strategic Solutions Implemented by NBFG:

​

1. Financial Organization & Infrastructure:

   • Created an integrated chart of accounts tailored for multiple entities.

   • Reconciled all income and expense transactions across numerous business bank and credit card accounts.

   • Developed a consolidated financial management framework with entity-level reporting.

2. Corporate Structure & Compliance:

   • Designed a company flow chart to clarify entity relationships and partner ownership.

   • Determined reasonable compensation for partners to ensure IRS compliance.

   • Established a compliant payroll system including Form 940 and W-2 filings.

   • Issued past-due K-1s to all business partners.

   • Filed and distributed 1099s to all eligible vendors.

3. Human Capital Strategy:

   • Advised client on hiring practices to qualify for the Work Opportunity Tax Credit (WOTC).

   • Implemented employee tracking to maintain eligibility for employment-related credits.

4. Tax Planning & Filing:

   • Filed all back personal and business tax returns.

   • Structured a tax payment plan to address federal and state liabilities.

   • Initiated quarterly estimated tax payments to prevent future liabilities.

5. Operational Budgeting & Financial Oversight:

   • Created an entity-wide budgeting system for cash flow forecasting and financial discipline.

   • Took over accounts payable/receivable management to streamline operations and improve cash management.

 

Advanced Tax Strategies Implemented or Recommended:

​

1. Tax Credit Optimization:

   • Maximized eligibility for WOTC for newly hired employees.

   • Explored additional federal, state, and local tax incentives for security businesses, including veteran hiring credits and training-related credits.

2. Executive Compensation Planning:

   • Implemented executive bonus plans tied to business performance.

   • Leveraged Section 162 executive bonus life insurance plans to offer tax-advantaged benefits to key executives while retaining talent.

3. Insurance & Retirement Planning:

   • Recommended business-owned life insurance policies to provide death benefit protection and potential tax-deferred growth.

   • Established retirement plan options (e.g., SEP IRA, Solo 401(k)) for tax deduction and long-term planning.

4. Entity Structuring for Tax Efficiency:

   • Advised on consolidation or restructuring of S-Corporations under a holding company model for simplified tax reporting.

   • Assessed each entity's income and expense flow for potential reallocation or intercompany agreements to reduce tax burden.

 

Results Achieved:

​

• Full financial reorganization and compliance across all seven business entities.

• All outstanding federal, state, and sales tax filings brought current.

• Issuance of all required K-1s, 1099s, payroll forms, and establishment of quarterly estimated payments.

• Potential to reduce tax liability by up to 50% using federal and state tax credits, deductions, and compensation strategies.

• Strengthened financial infrastructure and oversight enabling long-term scalability.

 

Conclusion:

 

New Beginning Financial Group, LLC’s intervention turned a disorganized and non-compliant multi-entity business into a compliant, tax-efficient, and scalable enterprise. Through meticulous restructuring, comprehensive financial management, and proactive tax strategy, the client not only gained peace of mind but positioned their security services business for sustainable growth and ongoing tax savings.