Research and Development Case Study
Telecom provider recovers 70% of taxes paid past four years
Background
As with many fast growing industries, particularly those that deliver complex products and services, claiming R&D expenditures, whose qualifications involve what the IRS describes as “uncertainty” and “a process of experimentation,” is a difficult and time consuming process. In addition, rapid expansion for this top 5 service provider didn’t allow them to effectively capture all available Enterprise Zone credits at point-of-hire.
The result: overpayment of hundreds of thousands in excess taxes.
Solution
Tax Credit Co. applied a two-pronged strategy to attack both the R&D and Enterprise Zone opportunities simultaneously.
A highly experienced R&D Recovery Team, complete with experienced R&D field analysts, statistical specialists, and tax counsel worked directly with the provider’s technology auspices to develop the best overall strategy. Then we were able to calculate all qualified costs for software development critical to service delivery.
A second team, working on a parallel timetable, worked with financial management to scrutinize documentable EZ credits, including the sensitive task of contacting all potentially eligible employees.
Results
Over 70% of federal and state taxes for the past four years were recovered. More importantly, long-term, their new Tax Incentive Portal enables the company to more efficiently manage and report any existing or new hire tax incentives.
