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TaxOps Welcomes Sean Espy as Partner, Tax Minimization

TaxOps — Tue, 14 Apr 2026 18:04:04 +0000

TaxOps welcomes Sean Espy as Partner in Tax Minimization

We are pleased to announce that Sean Espy has joined TaxOps Minimization as Partner. Sean brings more than 25 years of consulting experience spanning public accounting, legal, and industry settings — including Big Four public accounting and in-house tax department leadership — giving him a rare ability to understand and navigate complex tax challenges from both sides of the table.

Sean specializes in Research Credit Consulting, having successfully guided hundreds of clients — large, small, and mid-size — across a wide range of industries, including software, manufacturing, financial services, aerospace, food sciences, mining, medical devices, oil and gas refining, restaurant and retail, and renewable energies. His work has generated hundreds of millions of dollars in savings for clients throughout the U.S.

As Partner, Sean will lead firm operations, manage strategic growth, and develop our team. He will drive business development while upholding the standard of service TaxOps clients expect. Known for building relationships that endure long beyond individual engagements, Sean welcomes the opportunity to be of service.

About TaxOps

At TaxOps, business tax is all we do. Our teams have the knowledge and focus to solve tax problems with practical answers. By hiring Big Four-veteran leaders and experienced teams, you get tax strategists on your side — wherever business takes you. We deliver the strength, experience, and resources of a national tax brand with the hands-on client engagement of a boutique firm, across federal, corporate, state and local, and international tax, as well as tax minimization strategies for businesses. For an introductory call, visit TaxOps.com/contact.

Talk to a Business Tax Advocate

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TaxOps Announces Lindsay Haskell as Partner, Corporate Tax

TaxOps — Fri, 06 Mar 2026 17:02:10 +0000

Lindsay Haskell has been named Partner with TaxOps

TaxOps, an award-winning tax specialty firm, is pleased to announce that Lindsay Haskell has been named Partner. Since joining TaxOps in 2020, Lindsay has been an integral leader in the firm’s corporate tax practice, managing complex client engagements, strengthening long-term client relationships, and mentoring team members across the Federal Corporate Tax, State and Local Tax (SALT), and ASC 740 Tax Provision practices.

A trusted advisor to clients, Lindsay brings prior Big Four public accounting experience as well as in-house tax department leadership experience, allowing her to understand and navigate challenges from both perspectives. Clients value her deep technical expertise, thoughtful guidance, and hands-on attention to detail—paired with a straightforward, practical approach to solving complex tax challenges.

As Partner, Lindsay will take on expanded responsibilities across firm leadership, strategic growth initiatives, and team development. She will play a key role in shaping the future of the practice, advancing business development efforts, and continuing to deliver the high level of service TaxOps clients expect.

Please join us in congratulating Lindsay on her well-deserved promotion to Partner.

About TaxOps

At TaxOps, business tax is all we do. Our teams have the knowledge and focus to solve tax problems with practical tax answers. By hiring our Big Four-veteran leaders and experienced teams, you get tax strategists on your side supporting your strategy wherever business takes you. We deliver the strength, experience, and resources of a national tax brand with the hands-on client engagement of a boutique firm in federal, corporate, state and local and international tax as well as tax minimization strategies for businesses. For an introductory call, visit TaxOps.com/contact.

Talk to a Business Tax Advocate

The post TaxOps Announces Lindsay Haskell as Partner, Corporate Tax first appeared on TaxOps.

TaxOps 24th on Denver Business Journal Largest Accounting Firm List

TaxOps — Wed, 18 Feb 2026 17:01:25 +0000

TaxOps ranks 24th in the 2026 Denver Business Journal’s Largest Accounting Firm List

TaxOps is honored to be recognized as one of Denver’s Top Accounting Firms by the Denver Business Journal, earning the No. 24 spot among the region’s leading firms.

“This recognition reflects what our clients value most—deep technical tax expertise paired with practical, strategic guidance,” said Allen Gregory, Federal Tax Partner at TaxOps. “Our clients are looking for a focused team of experienced professionals that understand tax complexity, anticipates risk, and deliver solutions. That’s exactly what our TaxOps team was built to do.”

Based in Denver, TaxOps plays a critical role in supporting clients nationwide by combining national level firm experience and expertise with a local firm approach. The firm partners closely with businesses, by acting as an outsourced tax department delivering income tax consulting and compliance, ASC 740 advisory, transactional, state and local tax, and R&D credit solutions.

TaxOps’ inclusion on the Denver Business Journal’s list underscores the firm’s continued growth and reputation for providing comprehensive, high-impact tax services designed to meet the evolving needs of businesses navigating an increasingly complex tax and regulatory environment.

To learn more about our services, talk to a tax advocate at TaxOps.

Talk to a Business Tax Advocate

The post TaxOps 24th on Denver Business Journal Largest Accounting Firm List first appeared on TaxOps.

Audit Readiness: An IRS Primer for R&D Credit Compliance CPE

TaxOps — Wed, 12 Nov 2025 22:59:27 +0000

Join Mark Dunning for a session on audit readiness for R&D credits, where he’ll unpack the IRS’s evolving expectations around nexus, business component documentation, and contemporaneous recordkeeping. Learn practical strategies to build a defensible audit trail, improve cross-functional collaboration, and protect your R&D credit claims amid expanded reporting requirements.

Audit Readiness: An IRS Primer for R&D Credit Compliance

December 4 | 8:30 am – 9:20 am | 1 CPE credit

Registration

Audit readiness is not optional when it comes to R&D credits—it’s essential. In this final session of our 3-part series, we’ll focus on the IRS’s evolving expectations around nexus, business component documentation, and contemporaneous recordkeeping. With expanded reporting requirements now in effect, businesses must implement more rigorous tracking and documentation processes to support their claims and withstand IRS review. Mark Dunning, partner at TaxOps, will break down what the IRS is really asking for when it comes to business components by activity and how to build a defensible audit trail through contemporaneous documentation. This session will also explore the role of cross-functional collaboration—especially with engineering and accounting teams—in identifying gaps, improving data quality, and reducing audit risk. Whether you’ve already received an IRS notice or want to stay ahead of compliance challenges, this webinar will equip you with practical strategies to protect your R&D credit claims.

Learning Objectives

Interpret IRS expectations for documenting business components by activity to establish proper nexus for R&D credit claims.
Develop a defensible audit trail using contemporaneous documentation practices aligned with IRS standards.
Identify red flags in third-party R&D credit methodologies and evaluate associated compliance risks.
Formulate appropriate responses to IRS notices involving uncertain tax positions.
Implement strategies to mitigate Section 174 capitalization impacts and coordinate internal teams for audit readiness.

Major Topics

IRS expectations for nexus and business component documentation
Contemporaneous recordkeeping and audit trail best practices
Risk evaluation of aggressive credit methodologies
Response strategies for IRS correspondence and tax position disclosures
Section 174 capitalization planning and cross-functional compliance coordination

Presenters

Mark Dunning, Partner, TaxOps,

The post Audit Readiness: An IRS Primer for R&D Credit Compliance CPE first appeared on TaxOps.

IRS to Phase Out Paper Tax Refund Checks Starting September 30, 2025

TaxOps — Fri, 10 Oct 2025 20:05:37 +0000

The IRS will begin phasing out paper tax refund checks starting September 30, 2025, in favor of faster, safer, and more cost-effective electronic payments. Make sure your banking info is up to date and appropriate accounts are set up to receive refunds electronically.

In a move toward modernization, the Internal Revenue Service (IRS) and U.S. Department of the Treasury have announced the planned phase-out of paper tax refund checks for individual taxpayers beginning September 30, 2025, in accordance with Executive Order 14247.

Why the Change?

The transition to electronic payments is driven by three key goals:

Protecting Taxpayers
Paper checks are 16 times more likely to be lost, stolen, altered, or delayed compared to electronic payments. Direct deposit also reduces the risk of refund checks being returned as undeliverable.
Speeding Up Refunds
Taxpayers who file electronically and opt for direct deposit typically receive their refunds in less than 21 days, while paper checks can take six weeks or longer.
Reducing Costs
Electronic payments are more efficient and cheaper to process than paper checks.

What Taxpayers Need to Know

For now, filing procedures remain unchanged. Taxpayers should continue using existing forms and filing methods, including those submitting 2024 returns on extension before December 31, 2025.

Refunds will be issued digitally. The IRS will use direct deposit and other secure electronic methods. Alternatives will be available for those without access to traditional banking services, including prepaid debit cards and digital wallets. The IRS has indicated that limited exceptions will apply.

Takeaway

Executive Order 14247 mandates a shift to electronic payments for IRS transactions. While current payment options remain unchanged for now, further guidance is expected before the 2026 filing season. To prepare, those taxpayers who are not currently ready to interact with the IRS electronically should set up their systems to do so. This includes ensuring banking information is accurate or the appropriate accounts are set up to receive refunds electronically.

Stay informed by visiting IRS.gov/modernpayments.

Disclaimer: This content is for educational purposes only and is not intended, nor should it be relied upon, as legal, tax, accounting or investment advice. You should consult with a competent professional to discuss specifics of your situation and the applicability of the information presented.

Talk to a Business Tax Advocate

The post IRS to Phase Out Paper Tax Refund Checks Starting September 30, 2025 first appeared on TaxOps.

IRS Guidance Arrives for R&D Expensing Under OBBBA

TaxOps — Wed, 17 Sep 2025 17:06:52 +0000

The IRS issued Rev. Proc. 2025-28, detailing elections, disclosures & accounting changes for R&D and §174 expenses under new post-TCJA tax rules.

On August 28, 2025, the IRS released Revenue Procedure 2025-28, a 61-page guide for taxpayers navigating their way through new laws for the treatment of R&D and §174 expenses.

The comprehensive guidance specifies how companies can (1) elect to immediately deduct or amortize domestic R&D expenses paid or incurred in tax years beginning after December 31, 2024, and (2) options for recovering previously capitalized R&D expenses from 2022-2024 under the Tax Cuts and Jobs Act (TCJA).

Specifically, Rev. Proc. 2025-28 establishes implementation procedures for:

Domestic R&D expense treatment
Retroactive recovery of capitalized R&D (2022–2024)
Eligible small business elections
Section 280C elections and revocations
Filing guidance
Automatic accounting method changes
New disclosure statements and filing requirements
Updates to Rev. Proc. 2025-23

The Takeaway

Rev. Proc. 2025-28 provides much needed guidance on elections and accounting method changes under OBBBA standards as well as defines the requirements of additional statements and disclosures necessary in filing. These rules, however, are complex. Implementing this guidance means strategic decisions must be made on how a business taxpayer proceeds.

Now is the ideal time to work with your TaxOps advisor to proactively review your R&D expenses, reduce compliance risk, and leverage opportunities to advantageously move forward.

Eligible for R&D Credits?

Any company that develops new or improved products, processes, or software—in some cases, whether profitable or not—may qualify for these lucrative credits. Wondering if you are eligible to take advantage of lucrative research credits that could cut your federal and state tax liability?

Find out here! Eligible for Lucrative R&D Credits?

The More You Know

Talk to a Business Tax Advocate

The post IRS Guidance Arrives for R&D Expensing Under OBBBA first appeared on TaxOps.

IRS Enhances Pre-Filing Agreement Program to Support LB&I Taxpayers

TaxOps — Mon, 21 Jul 2025 20:23:13 +0000

The IRS updated its Pre-Filing Agreement program to help large businesses resolve tax issues early and reduce audit risk. Key changes include a streamlined process and new tools for eligibility and documentation.

The Internal Revenue Service (IRS) has made improvements to its Pre-Filing Agreement (PFA) program, aimed at providing greater certainty for large business and international (LB&I) taxpayers.

Detailed in IR-2025-69 on June 17, 2025, the updates are designed to expand access to cooperative tax compliance strategies that prevent disputes before they arise. The PFA program allows LB&I taxpayers to streamline the process of proactively addressing potential tax issues before filing, reducing audit risks and encouraging voluntary compliance.

Key enhancements to the Pre-Filing Agreement program include:

An updated webpage with program statistics, overview of the PFA process, and links to dispute prevention resources
Step-by-step instructions with guidance on submitting a PFA request, including response timelines and what to expect after submission
Resources to determine whether a PFA request is appropriate for their specific tax situation, along with documentation requirements to support submission
Revised instructions for aligning PFA submissions with tax filing deadlines

For more information or to access the updated resources, taxpayers can visit the IRS’s official PFA program webpage.

Protect Your Business

Ask the right questions: If a vendor promises a large credit, ask how they plan to get there. If the explanation sounds like a “slick used car salesman,” it probably is.

Read more: R&D Credits: Big Box Myths and Cutting Edge of “Quick and Easy”

Know your threshold: For small companies, having six full-time equivalent engineers typically justifies pursuing the credit. Anything less may not be worth the risk or cost.

Read more: A Guide for PE Firms: Hidden R&D Tax Credit Value in #6engineers

Eligible for R&D Credits?

Find out here! Eligible for Lucrative R&D Credits?

Talk to a Business Tax Advocate

The post IRS Enhances Pre-Filing Agreement Program to Support LB&I Taxpayers first appeared on TaxOps.

Make the Move: Federal Tax Manager

TaxOps — Tue, 15 Jul 2025 19:16:07 +0000

As a Federal Tax Manager at TaxOps, you’ll lead strategic engagements, mentor top talent, and help clients navigate sophisticated tax challenges—especially in flow-through entities and ownership structures.

TaxOps is a boutique business tax firm of specialized knowledge professionals who are passionate about client services, work-life balance and having fun. The clients we serve are upper middle-market business with U.S. and international operations that have interesting and challenging tax issues. Our collaborative teams have the streamlined authority and ability to have a meaningful impact with clients.

If you’re looking for a team environment, able to efficiently self-direct, motivated to take ownership, and have the requisite skills, TaxOps is looking for you! TaxOps is recognized as a Best Accounting Firms to Work For and Best Firms for Women by Accounting Today.

Come find out why at TaxOps.com. Apply online.

Federal Tax Manager

We are seeking a dynamic and experienced Tax Manager to join our Federal Services team, with a focus on solution outcomes for flow-through entities and High Net Worth (HNW) owners. This role blends technical tax expertise with leadership and client service, offering the opportunity to work on challenging engagements while mentoring a high-performing team.

Key Responsibilities

As a Federal Tax Manager, you’ll collaborate with and manage a team of tax specialists and consultants with advanced tax and industry experience, helping clients solve complex tax issues and facilitating better decision making.

Manage and review complex tax compliance and consulting engagements for partnerships, LLCs, and S corporations
Prepare and review business tax returns for sophisticated, multi-state entities
Provide strategic tax planning, research, and structuring advice
Collaborate with a team of tax specialists to solve complex tax issues and support client decision-making
Mentor staff and participate in development and training
Maintain strong client relationships and serve as a trusted advisor
Provide regular updates to leadership on project status and client needs
Proactively manage multiple projects and deadlines in a fast-paced environment

Qualifications

CPA license required
Bachelor’s degree in Accounting, Finance, or related field; Master’s in Taxation preferred
5–7+ years of relevant tax experience, ideally with Big Four or second-tier firm experience
Strong technical knowledge of partnership and S Corporation taxation, including basis rules, transaction planning, Section 704(c), 754 elections, and capital account maintenance
Experience with real estate investment structures, capital gain planning, private equity funds, and joint ventures a plus
Proficiency in tax software such as CCH Axcess, Engagement, and current research software tools

Perks

Competitive salary range of $110,000 – $135,000; bonus opportunities
Comprehensive benefits package
Flexible work arrangements and true work/life balance
Ongoing training, mentoring, and professional development
A collaborative, inclusive, and fun team culture

Employment Type

Full-time | Exempt
Location: In office and/or Remote | Lakewood, CO

Apply Online Now

TaxOps LLC is an equal opportunity employer. TaxOps LLC complies with all applicable federal, state and local laws regarding recruitment and hiring. All qualified applicants are considered for employment without regard to race, color, religion, age, sex, sexual orientation, gender identity, national origin, disability, protected veteran status, or any other category protected by applicable federal, state or local laws.

The post Make the Move: Federal Tax Manager first appeared on TaxOps.

A Win for Innovation: New Tax Law Restores Deduction for Domestic R&D Credit Expenses

TaxOps — Tue, 08 Jul 2025 16:22:48 +0000

The One Big Beautiful Bill Act (OBBB), signed into law on July 4, 2025, reinstates immediate deductions for domestic R&D expenses, reversing the TCJA’s prior amortization requirement. This change offers significant tax relief and flexibility for businesses—especially small ones—by allowing retroactive deductions, simplified compliance, and renewed incentives for U.S.-based innovation.

By Mark Dunning

In a significant shift for U.S. businesses, the One Big Beautiful Bill Act (OBBB)—signed into law on July 4, 2025—has reinstated immediate deductions for domestic research and development (R&D) expenditures. This long-awaited change reverses the 2017 Tax Cuts and Jobs Act (TCJA) requirement, for tax years beginning after 2021, that such expenses be capitalized and amortized over five years.

The new law introduces Section 174A, which applies to tax years beginning after December 31, 2024. It offers both relief and flexibility to businesses investing in innovation, particularly small businesses, by allowing retroactive deductions and simplifying compliance.

What’s in the Law

Here’s a breakdown of the key updates.

Immediate Deduction for Domestic R&D: Starting in 2025, businesses can fully deduct domestic R&D expenditures in the year they occur—no more five-year amortization.
Foreign R&D Still Capitalized: Research conducted outside the U.S. must continue to be amortized over 15 years, keeping the focus on domestic innovation.
Election Flexibility: Taxpayers can choose to either deduct or capitalize domestic R&D expenses starting in 2025. Even better? This election is treated as an automatic method change, requiring no Form 3115.
Retroactive Relief for Small Businesses: Businesses with average annual gross receipts of $31 million or less can elect to apply the new deduction rules retroactively to tax years 2022–2024 by amending these returns.
Accelerated Deduction for Previously Capitalized Costs: All taxpayers may elect to deduct any remaining unamortized domestic R&D expenditures from 2022–2024 either all at once in 2025 or ratably over 2025 and 2026.

The Takeaway

The IRS is expected to issue detailed regulations in the coming months, but the direction is clear: this is a big win for U.S.-based innovation. Most companies will likely return to claiming the reduced R&D tax credit starting in 2025, similar to how things worked before 2022.

By restoring immediate deductions, the OBBB reduces the tax burden on companies investing in U.S.-based research and simplifies tax compliance. For small businesses, the retroactive relief could mean real cash flow improvements and new opportunities to grow.

As you prepare for the 2025 tax year, consider:

Reviewing past filings for potential refund opportunities.
Evaluating whether to deduct or capitalize current R&E expenses.
Monitoring IRS guidance for compliance updates.
Deciding to elect the Reduced Credit (vs the Regular credit and adding this credit back to income) since this choice becomes applicable again.

This legislative shift underscores a broader policy focus on promoting domestic innovation and economic growth with credit incentives. Whether you’re a startup in a garage or a Fortune 500 innovator, the path to progress just got a little brighter.

Reach out to a TaxOps Advisor to discuss next steps and take advantage of restored deductions.

Eligible for R&D Credits?

Find out here! Eligible for Lucrative R&D Credits?

Talk to a Business Tax Advocate

The post A Win for Innovation: New Tax Law Restores Deduction for Domestic R&D Credit Expenses first appeared on TaxOps.

Too Good to Be True? The Hidden Risks of Pursuing Sketchy R&D Credit Claims

TaxOps — Mon, 30 Jun 2025 18:38:09 +0000

If it sounds too good to be true, it probably is–especially when it comes to R&D tax credits. Before you chase big refund estimates, make sure you’re not stepping into a compliance minefield.

By Mark Dunning and Jamie Overberg

There’s a trend in the marketplace right now to inflate R&D tax credit claims pushed by aggressive vendors—including some large, reputable firms. Taking risks like these have serious, real-world consequences, especially for unsuspecting companies.

Taxpayers can benefit from some practical advice to help select the right R&D credit vendor, one who will ensure compliance and help you avoid costly IRS audits.

How Vendors Inflate Claims

With IRS staffing historically low and audit rates perceived to be declining, some vendors have seized the opportunity to push exaggerated R&D claims. These firms—often including well-known national or Big Four accounting firms—entice businesses with promises of doubling or even tripling their credits.

But as Mark Dunning, partner at TaxOps Minimization, warned, “They think the risk is going down so, they don’t feel they need to do a correct job on their tax returns.”

To justify larger credits, some vendors include roles and expenses that clearly fall outside the scope of qualified R&D activities. These may include:

Sales and marketing personnel – Despite the tax code explicitly excluding these functions, some vendors still claim 100% of their wages under the guise of “technical sales” or “market research.”
Accounting and administrative staff – These roles may support R&D teams but their work is typically classified as general and administrative, which is not eligible for the credit.
Process engineers performing routine operations – While process development can qualify, routine maintenance or production support does not. Yet, vendors often overstate the qualifying nature of these activities.

While certain positions—like testers or solutions engineers—may qualify for partial inclusion if they directly support R&D efforts, many vendors apply a blanket approach, claiming 100% of wages or time without proper documentation or analysis. This not only inflates the credit but also exposes the company to significant audit risk.

“That’s where the aggressive positions come in and start to make us cringe. It’s not just about stretching the rules—it’s about ignoring them entirely in some cases,” Mark said.

The problem is compounded when vendors fail to differentiate between qualified research activities and supporting or managerial functions, leading to inflated claims that won’t hold up under IRS scrutiny.

This practice may temporarily boost a company’s credit, but it undermines the integrity of the claim and can lead to costly consequences when the IRS comes knocking. This practice may temporarily boost a company’s credit, but it undermines the integrity of the claim and can lead to costly consequences when the IRS comes knocking.

This practice may temporarily boost a company’s credit, but it undermines the integrity of the claim and can lead to costly consequences when the IRS comes knocking.

The Illusion of Safety with Big Firms

Many businesses assume that working with a large, reputable firm—especially one of the Big Four—automatically ensures compliance and insulates them from risk. This belief is not only misleading but potentially dangerous.

Some companies are lulled into a false sense of security simply because of the brand name attached to their tax filings.
“They feel that they can get away with it because they’re a “big” international firm,” Mark said.

But the reality is that vendor size has nothing to do with immunity when credit claims exceed what is allowable under the law. The size of a firm also has no bearing on whether their practices are compliant.

Some firms use their reputation as a shield while pushing the boundaries of what qualifies for the R&D credit. They may include unqualified roles, inflated time allocations, or the application of overly broad interpretations of the tax code—all in the name of delivering a bigger credit – while you pay their hourly fees for defense (for many years!) when the credit claim raises red flags.

An aggressive approach can backfire. If the IRS suspects that a company is making fraudulent or overly aggressive claims, it can reopen tax years well beyond the standard three-year statute of limitations—sometimes going back seven years or more. The consequences can be severe: expanded audits, penalties, reputational damage, and a strained relationship with the IRS that can affect future filings.

Moreover, relying on a firm’s size as a proxy for quality can lead to complacency. Businesses may stop asking critical questions or reviewing the details of their claims, assuming that the experts have it covered.

Mark emphasized, “Every company is ultimately responsible for what’s on its tax return, regardless of who prepared it.”
The prestige of a vendor should never replace due diligence. Trust must be earned through transparency, not assumed based on branding.

Trust must be earned through transparency, not assumed based on branding.

As Jamie Overberg, partner at TaxOps Minimization, pointed out, “Just because you can get away with something doesn’t mean you should.”

The Fallout: Real-World Consequences

Mark and Jamie share a couple real-world examples that illustrate the dangers of trusting aggressive R&D credit vendors—especially when decisions are driven by the promise of a bigger refund rather than sound tax strategy.

Japanese Automaker

In one case, a Japanese automotive manufacturer had a well-documented, IRS-approved methodology for calculating its R&D credit, including a pre-filing agreement that had passed multiple audits without issue.

However, a new VP of Tax was swayed by a Big Four firm’s pitch to double the credit—despite TaxOps already having accounted for every engineer and qualifying activity at the company.

The result?

A multi-year IRS audit that has become a “huge mess,” according to the automaker. Once confident in its compliance, the automaker is now entangled in a prolonged examination and has distanced itself from its former advisors out of embarrassment.

Food Services Company

In a separate case, a food services company initially declined to pursue the R&D credit due to the limited scope of qualifying activities in their operations. Years later, they engaged a Big Four firm that aggressively claimed a credit on their behalf.

When TaxOps recently reconnected with the company’s VP of Tax, the executive admitted—albeit with a knowing eye-roll—that the credit was likely overstated. His attitude suggested a belief that the Big Four’s reputation would shield them from IRS scrutiny.

But knowingly filing an inflated claim, even with a Big Four firm, doesn’t absolve a company of legal responsibility. The risk of audit and reputational damage remains very real for this VP of Tax and the food services company.

These stories underscore a critical lesson: just because a vendor can promise a bigger credit doesn’t mean it’s legitimate or safe for your business. The short-term gain of a larger refund can quickly be overshadowed by the long-term cost of an audit, penalties, and damaged credibility.

How to Protect Your Business

Mark and Jamie offer actionable advice for companies navigating the complex world of R&D tax credits. Their guidance is especially valuable for CFOs, tax directors, and business owners who may be relying on third-party vendors but still want to ensure their filings are defensible and compliant.

Educate yourself: Even if you outsource R&D credit work, tax managers and preparers should understand the basics of Section 41 and question anything that seems off.

Read more: Pay Less, Invest More

Ask the right questions: If a vendor promises a large credit, ask how they plan to get there. If the explanation sounds like a “slick used car salesman,” it probably is.

Read more: R&D Credits: Big Box Myths and Cutting Edge of “Quick and Easy”

Know your threshold: For small companies, having six full-time equivalent engineers typically justifies pursuing the credit. Anything less may not be worth the risk or cost.

Read more: A Guide for PE Firms: Hidden R&D Tax Credit Value in #6engineers

The R&D tax credit is a powerful incentive—but only when used responsibly. As the IRS adjusts their audit processes and enforcement capabilities, businesses must be vigilant about who they trust to prepare their claims. As Mark put it, “We can make up a whole bunch of stuff too—but that’s not what the law says, and that’s not legal.”

Eligible for R&D Credits?

Find out here! Eligible for Lucrative R&D Credits?

Talk to a Business Tax Advocate

The post Too Good to Be True? The Hidden Risks of Pursuing Sketchy R&D Credit Claims first appeared on TaxOps.