Insights that

R&D Tax Credit: What are the Trade or Business Requirements?

Taxpayers must be engaged in carrying on a trade or business for in-house research expenses or contract research expenses to qualify for R&D tax credit consideration.  This is an issue that bears consideration as start-up companies pursue R&D tax credits. The “trade or business” and “in carrying on” requirements for research credit purposes are generally […]

“Substantially All” Test: Little Sandy Coal Co. Inc. V. Commissioner Summary

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 […]

R&D Tax Credits and Qualification Requirements: Case of Siemer Milling Company V. Commissioner Summary

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 […]

Importance of Time Records for R&D Tax Credits: Case of Fudim V. Commissioner Summary

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 […]

Retaining Substantial Rights to Research for R&D Tax Credits: Case of Tangel V. Commissioner

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 […]

Document Base Period Detail Case: Research, Inc. V. United States of America

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 […]

What is LOG4J? Best Practices to Minimize Exposure

In December 2021, a major cybersecurity bug was detected in Log4j, a widely used piece of open-source logging software provided by a leading middleware provider (Apache Software Foundation). Although the security hole has been rapidly patched by most major companies, the vulnerability could persist for years as previously infiltrated computer networks are compromised. Log4j software […]

Have I Been Pwned? Best Practices for Email Security (“HIBP”) is a website that aggregates breaches and enables users to identify where their personal data has been exposed. The word “pwned” has its origins in video game culture and is typically used to imply someone has been controlled or compromised by a breach. A breach is an incident where data is or has […]