Companies spend significant time and effort collecting and compiling data and aggregating the documentation necessary to support federal and state research and development (R&D) tax credits. Often this effort is the undertaking of the scientists, engineers, and product development team members with competing priorities. As a result, many companies understate and/or under-document their credits, losing some or all of them on examination.
Stemming from our federal and state research tax credit law and examination experience, we have developed a flexible, customizable technology solution designed to build upon your existing technologies. Our unique web-based solution is designed to minimize disruption to your business by incorporating data from existing payroll and ERP systems. Our team will review your current R&D tax credit methodology and existing technologies to identify opportunities to further leverage our team and technology.
The IRS on May 14 released two pieces of guidance to field teams to facilitate administration of the 'safe harbor' for qualified research expenditures (QREs) under the Section 41 research tax credit that are based on an adjusted amount of ASC 730 research and development (R&D) costs. The safe harbor was provided under a Directive released by the Large Business & International Division (LB&I-04-0917-005) on September 11, 2017. (For detailed analysis of the 2017 Directive, see PwC Insight, IRS introduces research credit Directive for taxpayers that report R&D costs on audited financial statements, September 21, 2017.)