Marie Leone, CFO.com | US
April 28, 2010

R&D Studies vs R&D Software

R&D Software can be a helpful tool, but, ultimately, a company still needs to compile a thoroughly-documented study if they are going to be positioned to support R&D credit claims in the event of an audit. The process of identifying qualified R&D activities, of determining applicable percentages of staff time, of determining certain aspects of the required calculations (e.g., related to fixed base pc) cannot be fully automated. For large corporations with significant six figure - seven figure credits, the additional cost of R&D software can be warranted. For small to mid-sized companies, the software, as an additional tool to go along with the R&D study process, generally is not warranted.

Sincerely,
Jeffrey Feingold
Founder and Managing Partner
Tax Point Advisors - "We don't just do
R&D credits ... we do them right!"
www.taxpointadvisors.com
CA, FL, MA, NY, OH,TX
(800) 260-4138
info@taxpointadvisors.com

Posted by Jeffrey Feingold | May 7, 2010 1:44 PM ET

Inexpensive help for the little guy!

For companies of all size there are two significant issues with the existing R&D Credit regulations.
First, the regulations are difficult to follow without a thorough understanding of the tax law. This often requires qualified US manufacturers to hire outside consultants to guide them through the details. Unfortunately, the cost of consultant support has made it prohibitive for many small to mid-sized manufacturers to benefit from these federal incentives. Too bad for the little guy! Today, tens of thousands of these manufacturers have historically bypassed this valuable tax credit.
Second, in 2008, the IRS elevated the R&D Credit to a Tier 1 Issue, which has put more emphasis on the need for contemporaneous documentation. To defend the R&D Credit in an audit, a taxpayer needs to qualify every R&D project under the regulations, AND identify costs associated with the project while the costs are being incurred (known as nexus). This documentation requirement is burdensome on engineers and production management staff, which makes capturing and defending the Credit a challenge for most manufacturers.
To address both these issues, we built Titan Armor ? a low-cost software solution that helps manufacturers meet the current regulatory requirements for the R&D Tax Credit. You can get more information at www.titanarmor.com. We help the little guy and so many more!

Posted by Brian Lefever | May 6, 2010 12:25 AM ET

Audit exposure for R&D credits claimed by small and mid-size companies

One of the best tax incentive for small and mid-size companies is now the Federal R&D credit program. But it's very important - especially with current IRS intensified focus - to be aware of the importance of having a comprehensive R&D study done in support of a companies R&D tax credit claims. Tax Point Advisors works with companies across the U.S. in documenting companies qualifying R&D activities. TPA is the only specialty R&D tax credit service provider which conducts on-site analysis and documentation for EVERY R&D study, regardless of where the client is located in the U.S. TPA also includes all supporting calculations for every R&D claim in each study report (e.g., backup and computations for the "fixed base" percentage and other key calculations - essential to have in the event of an audit - are delivered to every client as part of the client's final study report). Companies will do well to review issues such as on-site analysis and review, inclusion of computations for fixed base and other calculations, and similar issues when assessing the relative merit of selecting an R&D service provider to assist in the filing of an R&D tax credit claim.

Jeffrey Feingold
Managing Partner
Tax Point Advisors
www.taxpointadvisors.com
800-260-4138

Posted by Jeffrey Feingold | Apr 30, 2010 12:17 AM ET

Time To Reexamine Tax Strategies

Yes, we've definitely seen increases in not only audit examinations, but the depth of the examinations encountered. Technological advances are a double-edged sword thus providing the IRS with more information than ever before. This is just the tip of the iceberg. Remember, IRS audits taking place now are for almost 3 years past. By the time the examinations address THIS year, the technological advances and information available will be light years ahead of what's being done today. Talented tax consultants, specializing in IRS work (like cpamiami.com), are in greater demand than ever! The time for management to rethink these priorities is now.

Posted by Mitch Helfer | Apr 29, 2010 9:01 AM ET