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BizTaxBuzz: New Proposal Would Simplify R&D Tax Credit
September 10, 2010
Making the R&D tax credit permanent is a long-held and well-publicized policy goal of the Administration, and would surely be a relief for companies that regularly take advantage of the tax break, giving them a more solid foundation for developing their research budgets and for tax planning.
Obama R&D Tax Credit: Worth a Second Look | Source: The Big Fat Finance Blog.
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R&D tax credit to help with nexus
There are two significant issues with the existing R&D Tax Credit regs. First, it’s a Tier 1 Issue, which means higher chance of audit. Second, the IRS requires contemporaneous documentation to support a claim for Credit. To address these issues, we built Titan Armor – a low-cost software solution that meets the IRS requirements for the R&D Tax Credit. We work with CPA firms to enhance their client services. You can get more information at www.titanarmor.com.
R&D Software an Unwarranted Expense
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