Main Issue:
- Documentation / Estimation
Facts:
- Taxpayer used estimates in place of actual amounts
Conclusion:
- Taxpayer may use estimates when he can show some factual foundation to make a reasonable estimate of the expense
Take-Away Point:
Companies do not need project tracking to qualify for the credit, however companies do need to have a credible basis for making any estimates. Companies are more likely to get court support in their estimates if it has proven that R&D activities are in existence and it is only the estimation of the amount of R&D at issue
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