Examining Recent R&D Tax Credit Court Cases and Focuses

The R&D Tax Credit is one of the most subjective areas of tax code. With the IRS placing more scrutiny on the R&D Tax Credit, it is important to be aware of areas of exposure when building a claim. Examining recently decided R&D court cases can help CPAs and their clients discover areas of improvement for R&D Tax Credit claims.

In Accounting Today, David Seibel discusses the Dirty Dozen list released by the IRS and whether the R&D Tax Credit is still safe to claim.

The CARES Act, Consolidated Appropriations Act, and American Rescue Plan have created and expanded numerous programs to assist businesses with navigating through the COVID-19 pandemic. One of the more prevalent programs from these laws is the Employee Retention Credit (ERC). As companies continue to pursue these programs, it is important to understand the impacts that utilizing these programs may have on other incentives, including the R&D Credit.

Shareholder Dave McGuire provides an outline of Congress’ long-awaited stimulus and omnibus spending mill and how it impacts specialty tax provisions.

As COVID-19 has forced countless industries to redefine how they do business in 2020 and beyond, the McGuire Sponsel team has assisted current and prospective clients in navigating the domino effect of new rules.

Recently, dental practices have been discussing eligibility to claim the Research and Development Tax Credit (R&D Credit). Though manufacturing companies, software developers, and engineering firms primarily claim the R&D Credit, the IRS definition of R&D is not exclusive to these industries. As long as taxpayers’ projects meet the criteria found in Section 41 of the tax code—which outlines criteria to receive credit for research activities—they are able to claim qualified expenses associated with those projects.

Over the past few months, the landscape of how we work has continuously evolved in response to COVID-19. While it may come as no surprise manufacturers are among those who have experienced the biggest disruptions to their operations, we at McGuire Sponsel have been pleasantly surprised to see many of our clients in various manufacturing industries experience an increase in R&D activities.

David Seibel returns to McGuire on the Wire to explain the background, opportunities, and potential challenges of the Research and Development Tax Credit.

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Coined in 2006 by then Google CEO Eric Schmidt, “cloud computing” is a general term that encompasses any shared computer utility that a business and its employees have access to through any computing device at any time and from anywhere. In recent years, cloud computing has become an essential company resource vital to a company’s growth. For taxpayers, correctly calculating the tax treatment of cloud computing expenses for research and development activities has become increasingly important.

As covered in our previous article, the passing of the Agricultural Improvement Act of 2018 (2018 Farm Bill) declassified hemp as a federally controlled substance beginning January 1, 2019. Hemp is defined as the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers with no more than a 0.3 percent concentration of THC on a dry weight basis. The removal of hemp from the controlled substance list allows growers to claim expenses and deductions on their tax returns, provided they follow their state’s USDA-approved guidelines.