Earlier this year, the Eighth Circuit Court of Appeals upheld a lower tax court decision denying research and development credits on the basis that a taxpayer’s contracts were considered “funded.” The case in question, Meyer, Borgman & Johnson, Inc. v. Comm'r of Internal Revenue, No. 7805-16 (U.S.T.C. Nov. 19, 2020), centered on whether specific contracts contained the necessary risk of financial loss language, where payment would be contingent on the success of Meyer, Borgman & Johnson, Inc.’s (MBJ) research. Having financial risk is a crucial element to claim a research and development tax credit, as noted in Section 41 of the Internal Revenue Code and the associated Treasury Regulations. This tenet has been noted in a number of cases throughout the years.
Mary Kimmitt
Mary Kimmitt joins CTI as a Senior Manager, providing guidance on tax laws and incentives for CTI’s clients. Mary received her Juris Doctorate from South Texas College of Law and is currently licensed to practice law in Texas. Mary also holds a Bachelor of Arts degree in History from Trinity University. She has over six years of prior legal, research, and tax compliance experience, both in legal and project management roles. Her business and technical acumen ensure that she has the skills to find effective solutions for clients, ranging from start-ups to Fortune level companies.
Recent Posts
How “Funded” Research Has Been Reshaped: Assessing Tax Credits After the Eighth Circuit
Written by
Mary Kimmitt. Updated Aug 14, 2024.
Fourth Circuit Clarifies Treatment of Expenses for Companies Claiming Multiple Tax Credits
Written by
Mary Kimmitt. Updated Jul 9, 2024.
The Fourth Circuit of the United States Court of Appeals recently affirmed a decision involving Section 41 of the Internal Revenue Code, which encompasses the Research and Development (R&D) Tax Credit. Specifically, on June 24, 2024, the Fourth Circuit upheld a Tax Court decision in favor of the Internal Revenue Service (IRS).