A $2B international company with over 40 locations across the United States had not claimed any Research Tax Credits (RTC) in the past due to a number of factors. Some were tax related – they were in losses, and had gone through several mergers and acquisitions which resulted in utilization issues. More importantly, this company’s main R&D group and formulations group was based in Europe. Given their fragmented structure in the United States, their tax department was not readily aware of any domestic-based specific Engineering or Research departments.
DST provided orientation and knowledge about what could qualify as research activities under Section 41. We were eager to demonstrate how the taxpayers’ facts were aligned with the regulations and a substantial RTC could be recognized for multiple years.