Efforts Underway to Renew & Strengthen Federal R&D Tax Credits

Posted by Jeffrey Feingold on 08.22.10


PRLog (Press Release) - Aug 22, 2010 - There has been considerable effort in Washington in recent weeks to renew, as well as to strengthen, the Federal R&D tax credit.  One recent proposal calls for a 50% increase in the R&D credit rate.  Other proposals include allowing the credit to be used to reduce the Alternative Minimum Tax or AMT, to make the credit permanent, and to increase the amount of the Alternative Simplified Credit.  Efforts are underway in Washington to renew the credit, which expired last December, next month, although some analysts believe the renewal will happen after the mid-term elections this November.  There has also been another significant taxpayer court victory related to R&D credits (the Proctor & Gamble case), which follows several other very significant taxpayer court victories in recent months.

Taken together, "the effort to both increase the value of the Federal R&D credit, along with several major taxpayer court victories this year, suggests that the R&D credit program will continue for years, and might well become permanent," according to Jeffrey Feingold, founder and Managing Partner of Tax Point Advisors, a leading national tax consulting firm specializing in R&D credit studies.  Feingold added "the implication of some of these proposals, such as allowing the credit to be an offset to AMT, would have a tremendous positive impact on clients of many of the CPA firms Tax Point Advisors works with around the U.S., and very likely for the U.S. economy and wage base as a whole."

Recent taxpayer court victories have also affirmed several key aspects of the R&D credit filing process.  "For example," Feingold noted, "a recent Tax Court case upheld the taxpayer's ability to use estimation, in certain instances, when documentation from prior tax periods was unavailable.   Additional court opinions have been favorable in several other areas related to the R&D credit study and filing process.  Tax Point will be happy to discuss the various favorable Court rulings and the impact on the R&D tax credit process" with any interested CPA firm."

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