Client Profile:
Industry: Internet Security Software |
Previous R&D Provider: None (completed internal) |
Problem:
- 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.
Solution:
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Results:
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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