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Research and Development Tax Credit Services
The federal government recognizes that innovation has always been a driving force in the American economy. Through the Research and Development (R&D) Tax Credit (which has expired and been extended 15 times to date) companies can realize a net benefit based on a percent of qualified annual research expenditures that exceed a base amount. In addition to the federal credit, many states offer local R&D tax credits, with parameters that closely mirror the federal program. Despite these opportunities, many companies fail to realize the full benefit of R&D credits because they either don't understand the full range of activities and expenses that qualify or don't develop adequate supporting documentation to sustain the credits under IRS or state examinations.
If you engage in the following activities, you potentially qualify for R&D tax credits:
- Developing new products
- Improving existing products
- Developing new or improved manufacturing or production processes
- Developing new production equipment
- Attempting to use new materials
- Designing and fabricating tools and dies
- Developing certain types of software
Our R&D tax credit specialists understand the nuances of the complex rules for qualification, have deep knowledge in the most credit-intensive industries, and have years of experience developing supportable tax credit claims. Our approach includes fully understanding your business and your research activities, scaling our tools and processes to fit your business, and partnering with you to ensure quality, minimize risk and make efficient use of everyone's time. We can help you maximize your investment in the future of your business.
The recent Leon Max v. Commissioner case has concerned practitioners and taxpayers claiming research credits under section 41.
The Tax Court explains various R&D credit concepts, including process of experimentation, qualified services and pilot models.
The case explains the IRS’ view of the requirements to establish substantial rights for work performed under contract for the R&D credit.
Misconceptions about the federal research and development tax credit leave many companies paying more tax than required.
New IRS guidance updates and clarifies the previous ASC 730 Directive for R&D credit claims of LB&I Taxpayers using U.S. GAAP rules.
The Sixth Circuit held that the DOJ should have been permitted to provide evidence regarding a taxpayer’s historic R&D credit information.
The Office of Tax Appeals determined that the taxpayer did not show that it undertook a process of experimentation.
IRS LB&I issued a memo to communicate the process to centralize compliance risk determinations for research credit cases.
IRS LB&I announce campaigns to improve compliance with fuel mixture credits and research issues related to sections 41 and 174.
A court found that conclusory statements without additional evidence were insufficient to support an R&D credit study.