Making A Move To CTI – R&D Success Story

Written by Mark Echols. Updated Oct 24, 2018.


Client Profile:


Internet Security Software

Previous R&D Provider: 

None (completed internal)


  • No Documentation to Support R&D Tax Credit Claims. Over the years, the company used their internal finance and accounting personnel to claim federal and state R&D tax credits for the tax years 2010 – 2016 and since the company was in a tax loss with millions of dollars of net operating loss (NOL) carryforwards they did not invest a lot of time documenting their research activities and expenses but instead calculated the credits based on estimates and assumptions
  • Current IRS Audit. After many years of claiming the R&D tax credit, the IRS opened up an examination into the federal tax returns filed for tax years 2015 and 2016 with particular interest in the R&D tax credit claims.


  • The company hired CTI to manage all aspects the IRS audit and identify other credit opportunities.
  • CTI handled all IRS correspondence and prepped the company’s software engineers for interviews with the IRS agent.
  • CTI immediately performed an R&D study to fully re-calculate and document all of the company’s R&D tax credits.           
  • The IRS audit lasted about 3 months and the IRS agent opened up the examination to include all prior years in which the credits were claimed.


With CTI’s R&D services, the company was able to:

  • Successfully defend the R&D tax credits previously claimed
  • Sustained over $1 million of federal R&D tax credits
  • 92% of all federal credits sustained (with only 8% disallowance)
  • Accurate calculations and full documentation to support all State R&D tax credits in case the State taxing authorities audit the company

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Topics: R&D Tax Credit

Mark Echols

Written by Mark Echols

Mark leads CTI’s national research and development (R&D) tax credits practice and is involved in all aspects of providing R&D tax credit services to his clients, including: conducting high-level R&D tax credit feasibility analyses, managing complex and comprehensive R&D tax credit studies and defending R&D tax credit claims under IRS and state taxing authority examinations.