CASE STUDY


MECHANICAL
ENGINEERING

HIGHLIGHTS

  • MECHANICAL ENGINEERING
    INDUSTRY
  • DISCOVERY OF MULTIPLE
    PROJECTS THAT QUALIFIED
    FOR R&D TAX CREDIT
  • AUDIT DEFENSE INCLUDED
    IN FEES
  • $3.4 MILLION IN R&D
    CREDITS OVER THE PAST
    10 YEARS

This $68 million mechanical and industrial engineering firm was engaged to renovate two buildings in a pharmaceutical manufacturing plant. The project included design and installation of new equipment, process piping, and utilities piping systems.

R&D QUALIFICATION

A significant amount of R&D was required for this particular project. The team had to design a new piping system that integrated as much of the old pipe as possible as well as design and develop new piping systems without negatively impacting flow rates. Evaluation of multiple pipe alternatives, testing, and utilization of computer-aided design helped the project team develop multiple system layout design options.

WHY Source Advisors

The firm ultimately chose Source Advisors Tax to evaluate the possibility of an R&D tax credit based on a referral from their CPA. Source Advisors focused on understanding the nature of their business and which projects could be qualified under section 41 of the Internal Revenue Code (IRC). Source Advisors’ effort included a thorough preliminary analysis of potential qualified projects, related expenses, and a usability analysis to estimate overall tax savings. This “feasibility” phase helped alleviate any uncertainty surrounding the process prior to starting the full engagement. In addition, Source Advisors fees include audit defense should an audit occur.

THE RESULTS SPEAK FOR THEMSELVES

As expected, the firm qualified for significant research and development tax credits. This included not only the project that they had initially identified, but multiple additional projects that were identified through a better understanding of the R&D tax credit rules. This included numerous ongoing initiatives that were based in mechanical engineering, physical, and computer sciences. Source Advisors has conducted annual R&D tax credit studies for the firm for the past 10 years. The firm continues to realize an annual credit of about $340,000.

HIGHLIGHTS

  • MECHANICAL ENGINEERING
    INDUSTRY
  • DISCOVERY OF MULTIPLE
    PROJECTS THAT QUALIFIED
    FOR R&D TAX CREDIT
  • AUDIT DEFENSE INCLUDED
    IN FEES
  • $3.4 MILLION IN R&D
    CREDITS OVER THE PAST
    10 YEARS