Research Tax Credit

houston tax attorney research tax credit

The research tax credit provides a significant incentive to engage in research activities.

It is one of the largest tax incentives provided by Congress.

For many taxpayers, the tax savings can often far exceed any other legitimate tax planning strategy.

About the R&D Tax Credit

The credit is not limited to taxpayers in the hi-tech or science industries. Taxpayers in just about any industry may qualify. This includes manufactures, consultants (such as engineers or architects), or companies with in-house computer staff.

The calculation for the credit is complicated. Wages, contract costs, supply costs, and certain computer rental costs can be included as qualified research expenses or QREs. The taxpayers gross receipts are also factored into the computation. The formula then compares these amounts for the current tax year to those for base years.

Generally, activities to design a product or process can qualify. Congress has added a number of requirements and limitations to try to clarify which design work qualifies.

The IRS’s Aggressive Approach to Research Tax Credits

The credit has also generated quite a bit of controversy between the IRS and taxpayers.

The IRS frequently audits and litigates research tax credits. This is evidenced by the growing body of court cases for research credits.

Here are a few examples:

We know these cases well.

Defending Your R&E Tax Credits

We help clients defend their research tax credits. This includes helping with IRS and state audits, appeals and litigation for research tax credits.

We have defended hundreds of research tax credits.

If you have taken a research tax credit and the IRS is auditing your return, we want to hear from you.

Call us at (713) 909-4906 or schedule an appointment to discuss your research tax credit case.

R&D Tax Credit Articles

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