Darren Labrie

Darren Labrie
Darren brings more than 20 years of experience in tax credits and business incentives. In his current role, he focuses on the overall operations of the practice and ensuring the highest level of service to clients.
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Recent Posts

R&D Tax Credits: Qualifying Software Development Contractor Expenses

Written by Darren Labrie. Updated Jul 28, 2016.

It is common for corporations to hire third-party software developers when conducting research and development activities, and the associated expenses are often overlooked since the consultants are not employees of the corporation.

When contractors perform research for your software development, you may incur both expenditures that would constitute qualified expenses and those that would not. For example, wages paid to a contractor would qualify, but travel expenses or paying rent would not. 

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Do Third-Party Software Developers Qualify For The R&D Tax Credit?

Written by Darren Labrie. Updated Jul 21, 2016.

As companies look to claim R&D tax credits for their software development activities, one often overlooked expense is payments made to consultants or contractors performing research activities for the company.

This qualifying expenditure for contract research expenses is defined under IRC §41(b)(3)(A) as 65% of “any amount paid or incurred by the taxpayer to any person (other than an employee of the taxpayer).”

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The #1 Best Practice For Capturing R&D Tax Credits

Written by Darren Labrie. Updated May 19, 2016.
As your pharmaceutical company increases its research and development (R&D) activities to design and develop new or improved drugs, it’s critical to have a formal process in place to track your R&D expenses.

One of the most lucrative incentives for companies that invest in R&D activities is the federal and state R&D tax credit. However, without the proper internal controls and procedures in place, documenting and maximizing these credits is challenging.

Where To Begin Your R&D Tax Credit Journey

Before you start evaluating your R&D activities, you must first fully understand the unique facts and circumstances of your research. At the outset of any research project, it’s important to map out your current accounting procedures that track potentially qualified research expenses.

Some pharmaceutical companies use formal project accounting, while others track expenses by cost center or departments. Based on these findings, a customized approach to capture qualified research expenses can yield good results and make the process of handling the workflow much more manageable.

With the right process in place, you reduce internal staff hours as well as the R&D service provider costs needed to document and calculate these tax credits.

Are You Waiting Until The Fiscal Year Ends?

It’s not uncommon for a company to rush an R&D tax credit evaluation, where internal accounting personnel are under significant time constraints and manpower to properly analyze costs.

Frequently, pharmaceutical companies wait until their fiscal year ends to even consider evaluating and documenting their qualified research expenses. This approach yields inconsistent and inadequate results that do not meet the IRS’s recordkeeping requirements to sustain the R&D tax credits.

Do not wait until the end of the year to review R&D activities and expenses. You want to set up procedures at the beginning of the year to regularly track, monitor and organize your types of R&D activities and costs  that meet the tax credit’s eligibility requirements.

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Drug Discovery And Development: How R&D Tax Credits Support Innovation

Written by Darren Labrie. Updated Mar 31, 2016.
The R&D tax credit is tailor-made for the pharmaceutical industry since substantial research and experimentation activities are needed to successfully introduce pharmaceutical drugs to the consumer.

Although the R&D tax credit was created for industries like the pharmaceutical industry, especially in drug discovery and development, many pharmaceutical companies still aren’t taking advantage of this business incentive. 
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Tax Incentives For Long-Term And Post-Acute Care Providers

Written by Darren Labrie. Updated Mar 10, 2016.

As the need for assisted living facilities is on the rise, the challenge with healthcare financial management is budgeting while also investing in growth. There’s a delicate balance you must strike between reducing costs and making investments to maintain your health system’s competitive edge and provide outstanding patient care.

To relieve your financial worries and take control of future growth, tax incentives free up money to invest back into your long-term care facilities. 

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4 Mistakes You Must Avoid When Capturing Green Building Incentives

Written by Darren Labrie. Updated Mar 3, 2016.

There’s no refuting it: Green building incentives are on the rise. As more programs are offered to incentivize businesses to become more energy efficient, the time is ripe for taking advantage of these tax benefit programs.

To truly maximize your green building tax benefit with minimal obstacles along the way, you definitely do not want to launch into claiming these benefits without establishing a proper process. Too often business either don’t capture as many benefits as they could, or worse, are audited due to unsubstantiated claims.

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3 Signs Your CPAs Need Expert Guidance On R&D Tax Credits

Written by Darren Labrie. Updated Feb 2, 2016.

There are specific instances in which CPAs simply don’t know what they don’t know about capturing R&D tax credits, and the choices made can manifest into issues later down the line.

The following are some signifiers of problematic practices for claiming R&D tax credits:

1. The CPA lacks the subject matter expertise (SME) in R&D tax credits (e.g., no R&D specialty practice areas. SME is necessary to close the loophole of properly substantiating credit claims, especially if under scrutiny by the IRS or the state.

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Is It Time To Outsource Real Estate Fixed Asset Reviews For Your Clients?

Written by Darren Labrie. Updated Jan 26, 2016.

As a CPA, when considering real estate tax strategies for your clients, you may be wondering which clients warrant a formal fixed asset review outside of the efforts made by your firm or your client when maintaining annual tax depreciation.

As you consider outsourcing fixed asset review work to a tax consulting firm, keep the following questions in mind:

Do your CPAs maintain clients’ fixed asset depreciation?

Deprecation is an important, but sometimes overlooked, aspect of the tax return preparation process – sometimes CPA firms are involved in that process and sometimes they’re not and the answer may vary by client. Many times with smaller or less fixed-asset-intensive clients, the client does the work, sending everything to the CPA for a cursory review before signing off on the tax return. It’s easy to see the potential exposure or missed opportunity that may result from this practice. 

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Repair Regulations: Real Estate Tax Incentives You Aren’t Capturing

Written by Darren Labrie. Updated Jan 13, 2016.

The recently issued “repair regulations” provide guidance regarding the capitalization of amounts paid to acquire, produce or improve tangible property. 

Final tangible property repair regulations provide rules covering three general areas:

  • Costs to acquire or produce tangible property;
  • Costs to improve tangible property; and
  • Dispositions. 

The tangible property regulations provide guidance to taxpayers to help determine the types of costs incurred for a current year expense, versus those that should be capitalized. The determining factors are “facts-and-circumstance-based” and a professional should be consulted to help you navigate the TPR.

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State Employment Incentives Spotlight: Keystone Opportunity Zone Program

Written by Darren Labrie. Updated Dec 7, 2015.

The Pennsylvania Keystone Opportunity Zone Program was created in 1998 as part of the Keystone Opportunity Zone, Keystone Opportunity Expansion Zone and Keystone Opportunity Improvement Zone Act.  

The program is administered by the Department of Community and Economic Development, and is a partnership between state and local government in collaboration with the Department of Revenue and the Department of Labor and Industry.  

The goal of the Keystone Opportunity Zone Program is to revitalize economically distressed urban and rural communities by eliminating taxes through credits, waivers and abatements.  

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