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Industry Spotlight

Demystifying the Misconceptions Behind Dentists Claiming the Research Tax Credit

dentists tax credit

For all types of credits and incentives, there will always be people that take advantage of taxpayers and put greed over integrity. The Research Tax Credit (RTC) is no different. Regardless of the industry, there are individuals who tend to lean on the side of taking aggressive positions, making claims that are unsubstantiated by the facts, and rolling the dice on claims that are under qualified as per the regulations and guidelines. There are some providers that claim credits for taxpayers without ensuring that they meet the qualification requirements, and they do so without having qualified professionals work with them to compile any type of credible study. 

The Dental industry is not immune to this aggressive approach by some practitioners when it comes to the RTC. Care must be taken to not take advantage and draw a clear line around qualified research activities as opposed to non-qualified or routine activities that are being claimed. This is why it is critical to work with a solid and reputable provider with experience in this industry. 

 

Qualified versus Non-Qualified Activities 

There are many dentists who are, in fact, conducting qualified research activities under the definition of the RTC program as outlined in Section 41. DST Advisory Group has worked with numerous dentists, including oral and maxillofacial surgeons, orthodontists, endodontists, and prosthodontists. They are experts in their field, and are innovating new protocols or techniques, developing new FDA-approved apparatuses or tools, educating the next generation of dental residents, and publishing articles to share the knowledge that they are gaining  from their advanced technologies. They are working in oral surgery and in maxillofacial reconstruction to redefine the future of modern dentistry as we know it. Those activities certainly qualify, and these dentists should be rewarded through this generous tax research program for the costs incurred and the risks that they are taking as they develop these new tools or techniques. 

If you’re doing legitimate and qualified work, you are entitled to credits. Don’t let the fear of the horror stories of non-qualified claimants in the industry persuade you not to claim them.

Not all dentists will qualify for the RTC. Examples of non-qualified activities include performing routine activities, administrative duties, purchasing technologies and using them in the standard way they were intended to be used, following existing protocols, and performing routine adaptations of existing protocols. 

DST’s team of Tax Engineers are transparent when discussing the nature of the activities with dental clients and their CPAs.  Our goal is to advise these dentists and CPAs to not include those unqualified activities in any kind of research credit claim. 

 

Picking a Credible Provider

Since there are some practitioners with less than scrupulous ethics, it is of the utmost importance that you trust the work ethic and credibility of your R&D tax claim specialist. There certainly are qualified research activities being conducted within the dental industry and working with an advisor whom you trust to identify and isolate those qualified activities should be the right approach to ensure that you get the credits that you are entitled to.

 

What We Stand for at DST Advisory Group 

At DST Advisory Group, we value honesty and open communication. When we conduct our studies, we stress the importance of substantial evidence to back up the claim. We ask our clients for different types of documentation that will further prove and validate to anyone who looks at the claim that the work is qualified. We work with you to make sure that you can back up your study.

This is why we include Tax Experts and Attorneys in the study process, but we also have a team of Tax Engineers who work together as a cohesive team to substantiate our clients’ RTC claim. Our Tax Engineers, who have experience with a wide array of industries including the dental industry, help bridge the gap between our tax team and the taxpayer. Together, we help identify the qualified projects and ensure that the work and documentation support the specific requirements laid out in Section 41 of the U.S. Tax Code. This connection helps create a solid report to back up the claim that focuses on the facts and will help validate the claim. 

We want to ensure that you as taxpayers get the credits that you are entitled to for the legitimate and qualified work you are doing. We take pride in our work, just as you take pride in yours. If there are no qualified research activities, we will be honest with you. If the IRS does submit a request for an audit, we will be there to defend the claim that we have drawn out for you. And if you have questions about the study or the 4-part test, we will be here to answer them for you.

If you’re ready to get started and learn about whether your practice qualifies you for the RTC, get in-touch with one of our Tax Engineers today!