Research Credit Extension Update August 2012
On Thursday August 2, the Senate Finance Committee approved a tax extenders package including the R&D tax credit, wind energy credit and the AMT patch. This is a positive step towards addressing the R&D credit for 2012 and 2013 and the legislation is expected...
Section 199 – Online Software – New CCA IRS Guidance
This week the IRS released a new Chief Counsel Advisory Opinion (CCA) regarding Online Software and Section 199. The key issue was applying the exception for software that is ‘substantially identical’ available from third parties via download or shrink-wrap. Thus, a...
Basim Shami Case – R&D Credit – Wages of Executives
In a recent TC Memo case, the Tax Court determined that certain higher level individuals within a cosmetics company did not materially participate in the R&D process (or at least did not prove they participated) to substantiate their R&D claim. In Basim Shami...
R&D Credit Extension on Horizon?
The Senate Finance Committee is currently weighing whether to include any expired business tax credits in with the payroll tax, including the R&D tax credit. However a vote appears likely on the payroll tax cut on Friday with no inclusion of the R&D credit in...
Bayer’s Motion to Adopt Statistical Sampling in Research Credit Case Denied
In a ruling dated February 6, 2012, the District Court for the Western District of Pennsylvania has denied Bayer’s Amended Motion for a Case Management/Protective Order Based on Statistical Sampling in its R&D credit case. Bayer is one of the largest...
Section 199 – IRS Issues Guidance on Benefits and Burdens of Ownership
In a new Field Directive issued February 1, 2012, the IRS has provided examiners guidance on reviewing facts to determine which party to a transaction has the benefits and burdens of ownership in order to claim the Section 199 Domestic Production Manufacturing...
What is considered “Funded” Research under the Research Credit Provisions (Section 41)
If an activity is “Funded” the taxpayer does not have financial risk and cannot claim the research credit for the project's costs. However, if the payment is contingent upon successful completion of the work, then the taxpayer/contractor is at risk and the activity...
New Appeals Guidance – Research Credit Redesignated
In an October 20, 2011 letter, the IRS has redesignated the research credit for purposes of Appeals settlements. Appeals cases involving the research credit still require informing the technical guidance coordinator for research credit and updating on progress of...
North Dakota Research Expense Credit offers a chance to double your R&D Benefits
For taxpayers with qualified R&D expenses in North Dakota, the State offers an excellent R&D credit that can be double the Federal benefit in many cases. The North Dakota R&D credit (known as the North Dakota research expense credit) is a tiered credit...
State R&D Credit News – New Refundable Minnesota Research Credit
On April 1, 2010, Minnesota Governor Tim Pawlenty signed legislation expanding the research credit for qualified R&D activities in Minnesota. For tax years beginning after December 31, 2009, the Minnesota research tax credit provides the following benefits: The...
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