Top 10 Questions to Ask a Cost Segregation Provider Before Working with Them
Navigating the complexities of tax planning can be overwhelming for businesses. One area that can offer significant tax savings is Cost Segregation. A well-executed Cost Segregation study can lead to accelerated depreciation deductions, allowing businesses to maximize their cash flow.
However, choosing the right provider to conduct this study is crucial. Below are the top 10 questions you should ask a Cost Segregation provider before engaging their services.
1. How long has your firm been performing Cost Segregation studies?
Experience matters when it comes to the complicated process of Cost Segregation. Knowing how many years a firm has been in the business will give you a sense of their expertise and reliability.
2. How many Cost Segregation studies has your firm completed?
Quantity can be an indicator of experience. The more studies a firm has conducted, the more likely they are to have dealt with situations similar to yours.
3. Does your firm employ degreed or professional engineers with specific Cost Segregation experience?
The role of engineering knowledge in a Cost Segregation study is essential for identifying and categorizing assets correctly. Ensure the firm has qualified engineers who specialize in this area.
4. Does your firm employ tax experts with specific Cost Segregation experience?
Just as important as engineering know-how is expertise in tax laws and regulations that pertain to Cost Segregation. A team that balances both is ideal.
5. Does your firm employ any ASCSP Certified Cost Segregation Professionals and if so, what role do they play?
Certification from the American Society of Cost Segregation Professionals (ASCSP) is a mark of quality and expertise. These professionals play a critical role in ensuring the study meets industry standards.
6. Are your studies performed using a detailed engineering-based approach, and do they comply with ASCSP standards?
A detailed engineering-based approach is generally considered the gold standard in Cost Segregation. Compliance with ASCSP standards is also vital for ensuring the quality and reliability of the study.
7. Does your firm subcontract any of the Cost Segregation study to a third party?
Subcontracting can sometimes dilute accountability and quality. Make sure you understand who exactly will be responsible for the various aspects of your study.
8. How does your firm defend its work in the event of an audit, if at all?
The possibility of an IRS audit is a real concern when undertaking a Cost Segregation study. Understand what measures the firm takes to stand behind their work should it ever be questioned by authorities.
9. Does your firm employ any ASCSP Certified Cost Segregation Professionals and if so, what role do they play?
This question is worth repeating to emphasize the importance of having certified professionals involved in your project. These individuals can offer an extra layer of assurance in the quality of the study.
10. Ask for references and follow up with them.
Client references can provide invaluable insights into the firm’s reliability, expertise, and customer service. Make sure to follow up with these references to get their firsthand experience.
By asking these critical questions, you can make an informed decision when selecting a Cost Segregation provider. It will help ensure that you receive a comprehensive, accurate study that will stand up to scrutiny and help your business save on taxes.