➤ Will I be audited?

The shorthand answer is no. Here is why:

 1. The R&D Tax Credit Program is allocated roughly $12 Billion annually, yet 95% of companies that qualify do not apply. The IRS does not go out of their way to target the 5% of business owners that apply and claim their R&D Tax Credit.

2. We use the ASC method. This is a conservative approach to claiming your R&D Tax Credit that stays well within the IRS safe harbor rules. If we were trying to recover more than you rightfully deserved we would be applying under the contemporaneous method. When the IRS sees that we have applied under the ASC method, it raises no red flags.

3.  The third point lies within the process itself. The IRS requires that all R&D Tax work for a business be done in paper format. The amended returns are signed with a wet signature, and then mailed to the appropriate IRS agency. They then assign it to a case manager and allow themselves up to 16 weeks to review. It is a real employee, a real set of eyes double checking our forms, documentation, calculations, etc. If approved, it will be sent to processing where the treasury will issue paper refund checks and mail them to the business owner. The IRS would not audit the paperwork that they already reviewed and approved.

4. We use the word “apply” because you are quite literally applying for your R&D Tax Credit. The process is similar to a mortgage: when you apply you could be declined, approved, or have the terms changed. It is exactly the same with your R&D Tax Credit. It is our job to know precisely how much will be approved by the IRS. This ensures at that step in the process, you are not wasting your time waiting for the IRS. You already know in complete confidence the exact amount you will be getting back.

➤ Why can’t my business CPA just do this for me?

We are in no way looking to become your CPA, nor are we trying to dislodge any relationship you have with your current business CPA. We simply specialize in Section 41 of the Tax Code, R&D. It works similar to the medical field where you may start with a general practitioner, and then be referred to a specialist like a cardiologist. In this scenario, your business CPA is the general practitioner, and we are the cardiologist.

 Most CPAs manage hundreds or thousands of clients, and it is unrealistic to think they have the capacity to explore avenues of limiting tax liability. With a Tax Code nearing 6 million words that changes every year, it is impossible to be an expert in everything.

➤ I do not do any R&D. Would I qualify?

Prior to 2006, even with the R&D Tax Credit as part of the Tax Code, most businesses were not applying because it was too cumbersome. The only means of applying for the R&D Tax Credit were via the Traditional or Contemporaneous methods, which required an incredible amount of support and documentation that the majority of businesses did not have.

To address this problem and incentivize business owners to apply, the IRS came out with the Alternative Simplified Credit Method (ASC). It is a conservative approach to come up with R&D Tax Credits knowing that most business owners do not have impeccable tax records and receipts. If you have all your ducks in row, you can apply for max credit and possibly get it, but if you don't, the IRS offers the ASC method to claim a smaller amount. With the Alternative Simplified Credit Method, you receive money every year you are eligible and you do not need to be in a specific industry to apply.

There is a third method of claiming R&D Tax Credits called the Reduced Credit Method that is primarily for pre-revenue companies. With this method the business will get the least amount of R&D Tax Credit. Using the ASC method, there is a good chance that a business qualifies if they turn a profit, pay taxes, and have employees. Not to mention, it is absolutely risk free to see if you qualify.

➤ Why should I trust your CPAs?

Our team of CPA specialists all hold Masters of Science degrees in businesses taxation and business tax law. They have authored best selling books, had practices of over 2,000 clients, and have worked for some of the biggest accounting firms and corporations in the country. Between the five (and 12 additional support staff) of them, they have over 200 years of experience in the accounting world. I would encourage you to check them out on cpaverify.org. You will know who your CPA is because their name will be signed on your CPA Engagement letter.