Claiming R&D Tax Credits Now Cost Efficient for Smaller Manufacturers

Houston, TX, August 17, 2007 --(PR.com)-- FortisTCS has announced a new “no upfront cost” program targeting the 95% of manufacturers and technology companies who are eligible for Federal and State Research & Development Tax Credits but have found the process of documenting and then claiming these credits impractical. Instead of incurring large upfront expenses for engineering and accounting studies, FortisTCS has begun to provide the necessary services entirely on a contingency fee basis. Quite simply, they provide all of the studies and other documentation and prepare all of the tax forms and are paid solely by a percentage of the tax credits recovered (typically 25% to 30%) on behalf of their client companies.

The Federal R&D tax credit program has been part of the tax code since 1981 and although it has been allowed to expire and/or been amended at least as 13 times, is remains one of the most valuable business tax benefits overall. Unfortunately, due to the level of complexity involved, the majority of the tax benefits currently go to the largest companies, generally those with the full time staff to pursue them. In 2004, for example, IRS data shows that 54% of the $5.5 billion in credits was claimed by just 100 companies. Some estimates are that over 100,000 U.S. companies could claim these credits and would receive back as much as $30 billion if they did so, which is far in excess of the roughly $7 billion per year now taken.

Most manufacturers incur significant costs that qualify for R&D Tax Credits, as these are available for a wide range of activities beyond traditional “product development”. As examples; expenses involved in producing the same products with different materials, or doing so in a more energy efficient or environmentally friendly manner can also qualify. The issue has been that only larger companies want to take on the somewhat high initial study and filing costs to qualify for the credits and unless they use one of the Big Four accounting firms, their regular accountants may not be up to the task of navigating the somewhat Byzantine rules of the tax credit programs. As some 35 states also have their own versions of the R&D credit programs, this can add additional complications to the process as many do not mirror the Federal standards for qualification.

If your company has sales in excess of $3 million per year and want to investigate claiming R&D Tax Credits at either the Federal or state levels you may want to contact FortisTCS and see if your business profile qualifies for this new no upfront cost program. FortisTCS is a specialized accounting and legal firm that deals exclusively in tax credits. Although the R&D area is their largest, they also do a significant business in the various tax incentives allowable for firms that export their products or that operate from one or more enterprise zones. Over the last six years, FortisTCS has recovered an average of $480,000 in tax credits for each of their nearly 700 corporate clients (see www.FortisTCS.com) ranging from $100,000 to over $12 million. Point of contact for further information is Rob Aldridge at 541-765-8988 or Robert.Aldridge@FortisTCS.com.

###