How Expanding the Scope of Your R&D Tax Credit Study Can Unlock Hidden Value
By Philip Overly, MTax, BBA
At many large companies, the R&D tax credit process becomes routine over time. The same departments are interviewed. The same assumptions are carried forward. The same methodology is applied year after year. While consistency can feel safe, it can also create a hidden problem: companies may be significantly under-claiming valuable credits simply because they are not seeing the full picture.
We recently worked with a new tax director at a large company who experienced exactly this challenge. As he reviewed prior tax filings after joining the organization, he had a strong instinct that the company’s R&D tax credit seemed too low. The issue was not that the company lacked innovative activity. The issue was that his internal team simply did not have the bandwidth to perform a deeper, more comprehensive review.
That uncertainty is something many tax executives understand well. There is constant pressure to maximize value for the organization while also maintaining compliance and minimizing audit exposure. When regulations are complex and evolving, it can be difficult to know whether your current process is truly capturing everything that qualifies.
Once our team at DST Advisory Group began the engagement, we approached the study differently. Rather than limiting the review to the traditional groups that had historically been included, we expanded the scope of the analysis across the organization.
Our technical team, made up of Tax Engineers, CPAs, and former IRS agents, worked directly with leaders from departments that had never previously been evaluated for eligibility. We explained the IRS 4-part test in practical, understandable language and spent time listening to how their teams approached technical challenges, process improvements, and innovation initiatives.
What happened next was incredibly powerful.
As these conversations unfolded, multiple participants told us that this was the clearest explanation of the R&D credit rules they had ever received. For the first time, technical teams fully understood how their work connected to the credit. Instead of viewing the process as a tax exercise, they began to recognize the innovation already happening inside their departments.
That shift changed everything.
By identifying previously overlooked pockets of qualifying activity, we were able to significantly increase the company’s R&D tax credit. Just as importantly, we provided the tax director with something equally valuable: clarity and confidence. The technical report we delivered gave him a far deeper understanding of where qualifying R&D was taking place throughout the organization and created stronger support for the company’s filing position.
This is where specialized expertise matters. A standard checklist approach may satisfy compliance requirements, but it often misses the broader operational realities inside large organizations. Our multidisciplinary team bridges the gap between tax law, engineering, and audit defense to help companies uncover opportunities they may not realize exist.
For many companies, the problem is not that they are calculating the credit incorrectly. The problem is that they are not seeing the full scope of qualifying activity within their business.
If your company has been relying on the same process year after year, it may be time for a fresh perspective.
Contact DST Advisory Group for a free scope-out or review of your current R&D tax credit claim. We would be happy to help identify potential exposure areas, missed opportunities, and ways to strengthen your R&D Tax Credit Study documentation and filing position.