R&D Case Law: Learning From Legal Battles

Occasionally, often in the most extreme circumstances, research and development tax credit audit appeals can end up in court. The cases are filed with the US tax court, and it is up to the court to decipher and clarify the rules and regulations for the R&D credit. The rulings are then applied to the way companies and the IRS handle the tax credit. These changes are why it’s essential to stay up to date with the latest issues and verdicts within R&D case law. Only then is it possible to create stronger claims in order to increase the savings you’re able to achieve through the use of R&D tax credits.

A Recent Significant Issue

In September 2013, the US chemical firm, Dow, failed to win a legal battle over its claims for R&D tax credits. The US appeal court decided that the money the company was hoping to recoup included indirect research costs, and this should be a cautionary tale for all companies that put a lot of money into R&D.

The three judges made it clear that tax credits are only to be used for the cost that the taxpayer pays out for qualified research which would not arise in any other circumstances. In the Dow case, the claim was being made for supplies used for research that would already have been purchased so they could be used in the finished product.

Click here to access our full database of R&D tax credit case law. 

Supporting Your Claim

At Swanson Reed, we come ready with the expertise and experience to assist any company with their R&D audit. Should you be faced with an audit, our chartered accountants will help you through the entire process. Initially, we can help to ensure that you have a complete and accurate claim; we have an audit checklist available which you can use to eliminate any uncertainty with your R&D claim. The checklist is designed to ensure that you have all the information and documents required that would give evidence and support for the R&D tax credit. If your claim is audited, we won’t leave you to face it alone.

Our experts will make the entire process as straightforward as we possibly can. We will work with your accounts and examine your documentation and claims to ensure that we’re able to establish a firm argument that will support your claim and have a positive outcome. Our specialist R&D tax advisors are on hand to explain the terminology and the process involved. We have an excellent record of defending our clients across a variety of industries.

Need Assistance With Your R&D?

Contact us today if you need assistance making your claim or if you need help preparing for an upcoming audit. We’re on hand to provide you with up-to-date information and can guide you through the motions of your claim or audit with minimal disruption to your business. We have the expertise, we provide complete confidentiality at all times, and we provide only the highest-quality service.

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