Kevin has worked for a Minnesota-based custom manufacturing company for the past 40 years. During that time, he’s had several R&D tax credit experts examine his business, but they all came out saying he didn’t have any qualifying expenses.
One visit from Black Line Group changed that and allowed Kevin to reinvest the tax savings into his business to be more competitive, grow faster, and increase profitability.
Kevin’s Problem: Not Knowing Where to Look for R&D Tax Credits
Kevin thought his business should qualify for the R&D tax credit. However, what he didn’t realize was how many of his problem-solving activities were R&D-related.
“My client is very innovative in the way that they deal with their customers,” says Kevin’s CPA, Rich. “He’s also very humble in the expertise that he brings.”
Because of Kevin’s humility, he undersold his process to previous R&D vendors. That, coupled with the R&D vendors’ lack of hands-on manufacturing expertise, led them to conclude that there weren’t any R&D tax credits applicable to his business. Rich continues, “We had more than one vender that reviewed his entire operation and came away saying, ‘There’s no R&D tax credit here.’”
Like many manufacturers, Kevin didn’t completely understand the breadth of processes that the R&D tax credit applies to. Take it from Rich, “It’s not necessarily research and development as a lot of clients think of it. It’s really something baked into their process that they don’t even appreciate.”
All Kevin needed was the right R&D vendor with deep hands-on manufacturing knowledge who was thorough enough to dissect his processes and identify all of the possible R&D tax credit opportunities.
Kevin’s Solution: A Thorough Analysis of His Business
“The Black Line Group’s manufacturing expertise was critical. They understood the language of manufacturing, and that was probably the biggest key that really helped me feel comfortable with the process,” Kevin states.
By having a strong understanding of the manufacturing process due to years of first-hand experience in the industry, Black Line Group was able to take a deep dive into all of Kevin’s processes. In turn, this meant Kevin didn’t need to spend much personal time explaining processes while Black Line Group performed the study.
“I was able to have some of our support staff gather the information that they would need, and Black Line Group did a lot of number crunching to sift through thousands of pages of data to come up with the information needed for the R&D tax credit,” says Kevin. In just three short months, Black Line Group had completely assessed his business and determined his R&D credit.
The End Result: The Purchase of a Turret Press & Press Brake, Plus a Little in the Bank for a Rainy Day
“They understood what credits were available and how aggressive they could be. My tax experts were very comfortable with the outcomes they had. They act in a credible and very ethical manner,” said Rich.
When the study ended, Kevin’s company was able to use the R&D tax credits to reinvest in their business. That reinvestment came in the form of a turret press and press brake, which will make them more efficient and profitable in their future custom manufacturing projects.
Rich concluded, “I measure the success of Black Line Group by the response from my client. My client was extremely happy.”
Interested in finding available tax credits in your own business? Click the button below to see if you may qualify! If you’re a CPA, and you’d like to know if one of your clients qualifies, click here to find out.