Case Study

Client Background: 

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. 

Client Benefit:

DST offered to conduct a detailed assessment to provide an accurate benefit range. During this process, multiple conference calls were held with various divisions and technical personnel. Specifically, DST conducted 8 technical scope out calls, reviewed over 6,000 employee job titles, and evaluated $140M of tracked project costs.  

The proposal included a credible description of the taxpayers’ facts and the areas of qualifying activities, an estimate of qualified research expenses (QREs), as well as the federal credit benefit range for the years under scope. During this assessment phase, DST was also able to propose a detailed workplan and timeline expectation, including estimated hours for both DST and the taxpayers’ SMEs.  The workplan was critical in showing the tax department that the vast majority of the effort was on DST’s side, and that the time required from the various departments would be minimal and efficient. 

The proposal, workplan, estimated benefit range, timeline and any utilization considerations were all presented to the client.  Although the tax department was involved in the assessment at each stage, the final presentation allowed for a deliverable to be reviewed and compared with the other competitors’ bids. 

Previous Case Study

A $200M food equipment manufacturer

Next Case Study

A Tier One Automotive supplier