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Research and Experimentation Tax Credit
Retroactive Study: Design/Build Company

Client Profile
McGuire Sponsel was engaged by a design/build company that engineers and integrates components for large, automated equipment used in the automotive and medical industries. The company has annual revenue of $18 million.

The Challenge
The design/build company was in actuality a product distributor. McGuire Sponsel conducted extensive qualified research and discovered that the company had a substantial amount of engineering time spent on customizing equipment for their clients. McGuire Sponsel’s primary focus was to prove to the IRS that the company was more than just a product distributor.

Study Results
Since the company’s engineering group doubled as its sales force, McGuire Sponsel was able to utilize its technical sales experience with its engineering experience to maximize credit research. Over a four-year period, McGuire Sponsel identified $2.6 million of Qualified Research Expenses (QREs), resulting in $210,000 in tax credits over the four years.