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Taxpayers must meet the process of experimentation “substantially all” test for each R&D project. In the case of Little Sandy Coal Co. Inc. v. Commissioner, the court held a taxpayer was not entitled to the R&D tax credit for activities related to the development of a tanker and a dry dock.  The court determined the […]

Taxpayers should be able to document how an R7d project meets all qualification requirements In the case of Siemer Milling Company v. Commissioner, the court held a taxpayer engaged in the business of milling and selling wheat flour was not entitled to the R&D tax credit.  The court examined seven projects, all related to the […]

Taxpayers should have strong defensible support to rely on time estimates In 1985, Efrem Fudim formed Light Sculpting Co. and innovated a process that became known as rapid modelling. It utilizes ultraviolet light and light-sensitive liquid polymers to fabricate plastic objects directly from instructions provided by a computer-aided design system. Mr. Fudim employed his wife […]

Taxpayers must retain substantial rights to research results to claim R&D tax credits In the case of Tangel v. Commissioner, the court held the taxpayer was not entitled to the R&D tax credit because it did not retain substantial rights to the research it performed.  The court analyzed the terms and conditions of the contract […]

Taxpayers must maintain and document base period detail for R&D credit calculations In the case of Research, Inc. v. United States of America, the court held Research, Inc. was not entitled to additional R&D tax credits for its tax year ending September 20, 1985, due to failure to accurately reflect its base period qualified research […]