FEDERAL INCOME TAX SERVICES

R&D Tax Credit Services

The R&D Tax Credit is a significant and immediate source of cash for many companies. Historical IRS regulations have made qualifying for the R&D tax credit more appealing to many companies and industries. These regulations:

  • Dramatically broaden the traditional tax definition of “R&D”
  • Apply retroactively to prior tax years
  • Generate refunds of previously paid federal and state income taxes
  • Provide greater flexibility in certain record-keeping/documentation requirements
  • Expand the definition of internal-use software

The opportunity for sales/use tax reduction is also available prospectively. If Historically, the majority of companies believed that the R&D Tax Credit study was not applicable to them due to the following:

  • “We have not performed any R&D, it doesn’t seem significant and we have no documentation or cost accounting systems to support any qualifying costs.”
  • “My company doesn’t perform any R&D. My competitors have similar products and offerings. The R&D Credit is not applicable to my business.”
  • “My company is in the financial services industry. We would not qualify for the R&D Credit.”
  • “We already claim the R&D credit every year. Why do an R&D Study now?”
  • “We performed R&D more in past years. This presents a barrier for claiming the credit today.”
  • “The cost of hiring experts to gather the necessary documentation is intrusive and expensive. My employees cannot take time to focus on this.”
  • “The R&D tax credit rules seem too complex and not meant for me.”

Qualifying R&D Activities

Many companies overlook qualifying R&D expenditures as defined by the tax law. Many day-to-day operations such as engineering, production, quality assurance, sales, marketing, purchasing and information technology all qualify for the R&D Credit. If your company is involved in any of the following activities, you may be able to retroactively claim the R&D credit for federal and state income tax purposes, obtain significant cash refunds and establish the methodology to claim the credit in future years:

  • Manufacturing products
  • Developing new products, processes, formulas, software, techniques, etc.
  • Improving existing products, processes, formulas, software, techniques, etc.
  • Creating more reliable products, processes, formulas, software, techniques, etc.
  • Developing prototypes or models, including computer generated
  • Designing tools, jigs, molds, dies
  • Applying for patents
  • Testing for quality certification
  • Testing new concepts
  • Sourcing new raw materials
  • Developing new technology
  • Improving existing or building new facilities
  • Employing outside consultants and/or contractors to do any of the above activities

Think assists with the following services:

  • Assessing R&D expenditures identified for financial reporting purposes.
  • Analyzing current R&D projects qualifying for the credit.
  • Analyzing technical issues and itemization of qualifying costs.
  • Organizing, distributing, collecting R&D surveys / questionnaires.
  • Conducting and documenting detail interviews with company personnel.
  • Gathering the required contemporaneous documentation to support qualifying wages, supplies and contractor costs.
  • Conducting statistical sampling of projects as required including sampling, statistical validity, regression analysis, data mining/analysis, modeling, estimation, probability/risk analysis, .etc.
  • Providing IRS and state audit representation including response to IDRs.
  • Assisting understaffed tax departments and CPAs with experienced temporary loan staff.

Contact us to learn more

Phone: (714) 434-6700
Fax: (714) 640-8645

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