1. Initial Consultation and Assessment of the Federal and State R&D Tax Credits

Our Technical Consultants meet face-to-face with the client and its CPA firm to evaluate whether the company is conducting qualifying research activities. Once it’s established the client is carrying out qualifying work, the Technical Consulting team then performs a no-cost assessment of the client’s development expenses for the purpose of approximating the research credits for the tax years in question. Once the estimated tax credit figures are determined, we then prepare a detailed proposal, which summarizes the estimated tax credit figures as well as a scope of work, our fixed fee and other particulars relating to the research tax credit study.

2. Preparation of the Financial Workpapers regarding the Federal and State R&D Tax Credits

Our Financial Services group works with the client’s staff to identify and obtain all the qualifying research expenses such as the wages, supply expenses, and contract expenses attributable to the identified development efforts. This process involves collecting employee information, payroll reports and revenue figures as well as contemporaneous documentation including W2s, 1099s and vendor invoices. Once all the relevant information is collected, our Financial Services group then computes the federal and applicable state research tax credits and prepares a comprehensive workpaper document for use by the client’s CPA firm to claim the credits on the Federal and state returns.

3. Preparation of the Technical Supporting Documentation

The engineers in our Technical Services group meet with the client’s staff to establish a comprehensive list of qualified research and development activities for each of the tax years in question. The engineering team then discusses each development effort with the client’s staff to attain the salient details relating to each project. Once the necessary information is obtained, the Technical Services group then prepares comprehensive written reports that describe how the client’s development efforts meet the IRS’s ‘four tests’ regarding qualifying research activities while highlighting the technological objectives and challenges as well as the experimental processes and outcomes associated with each project.

4. Delivery of the R&D Tax Credit Study Report

Once we have incorporated any revisions requested by the client regarding the Technical Supporting Documentation materials, we then assemble and deliver the finalized Research Tax Credit Study for each tax year to the client in the form of a bound report as well as electronic format. This finalized deliverable is provided to the client and their CPA at the conclusion of the study.

5. Audit Support

In addition to providing the above-described financial and technical services, we also provide support in the event the client’s tax credit claim or supporting documentation is subjected to examination by either the IRS or state tax authorities. If our assistance is required beyond the prearranged number of ‘no-cost’ support hours described in our engagement letter, any additional work on our part is billed at our standard hourly rates, which are described in a separate engagement letter that outlines the scope of additional services.

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