Documentation Is Of Key Importance - R...D Tax Credit

By Chris Dotson

Presidential support of the R...D Tax Credit:

On March 23rd, President Obama spoke at the White House about making the R...D Tax Credit one of a few permanent tax incentives available to manufacturers:

"This is a tax credit that returns $2 to the economy for every dollar we spend. Yet over the years we've allowed this credit to lapse or we've extended it year to year -- even just a few months at a time. Under my budget, this tax credit will no longer fall prey to the whims of politics and partisanship. It will be far more effective when businesses like yours can count on it, when you've got some stability and reliability."

The R...D Tax Credit, created by Congress in'81, is a tax credit (tax incentive) for U.S.-based innovation. It's designed to foster private sector research and development investment in product development, process improvements, and technology innovation. However, IRS regulations require that any manufacturer claiming the R...D Tax Credit must be able to prove: 1) that their activities meet the definition of qualified research, and 2) that the costs associated with these activities are documented appropriately. These requirements can be a significant administrative burden on the manufacturer.

Recent IRS Audit Results:

Recently in a IRS audit, the Service disallowed 100% of taxpayer's claim for the R...D Tax Credit "and attached fees and penalties". In which part the auditor's did include the following statements.

"It is not enough to engage in qualified research activities to be entitled to the research credit. Taxpayers claiming the credit must maintain sufficient records detailing and substantiating the expenditures claimed as eligible for the credit. . . . The Taxpayer, under its own admission, is unable to provide any records showing how many hours each employee worked on any given project during the credit year. Nor are they able to provide any records showing how many hours any employee's work involved activities that might have constituted qualified research."

These of Which Titan Armor will meet in the R...D Credit documentation requirements:

Titan Armor is a application in which is web-based and is designed to meet or exceed the IRS' current expectations for the research and development "contemporaneous" documentation. A project build upon management fundamentals, Titan Armor ensures of a quick and easy way for qualified employees to track time against projects, and mark those projects for innovations in the R...D Tax Credit, per the IRS requirements.

At only $295 per month Titan Armor is a great deal*, not to mention the first 30 days FREE!

The goal is to ad ALL US Manufacturers document and gain their fair share of the federal tax credits. We do this by offering Armor at $295/month per facility and with unlimited users. Documenting and defending the R...D Tax Credits have never been cheaper. Armor's website also provides a no-cost, 30-day trial for all manufacturers. With no commitment to purchase, you can get access to Titan Armor right now, and see for yourself that documenting your research and development activities correctly is fast and easy!

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