Precision Metal: $850K R&D Tax Credits Recovery
How comprehensive R&D credit analysis and documentation helped a precision metal fabricator recover $850,000 in previously unclaimed tax credits across three years of qualifying manufacturing innovations and process improvements.
Executive Summary
Precision Metal Fabricators, a leading custom metal fabrication company, partnered with Schapira CPAs to conduct a comprehensive R&D tax credit study. Through detailed analysis of manufacturing processes, equipment innovations, and process improvements, we identified and documented $850,000 in qualifying R&D activities across three tax years, resulting in immediate cash flow benefits and ongoing credit opportunities.
Client Profile
Precision Metal Fabricators
Custom Metal Fabrication & Manufacturing
Company Details
Manufacturing Capabilities
- Precision CNC machining
- Custom welding & fabrication
- Sheet metal forming & stamping
- Assembly & finishing services
Precision Metal Fabricators serves diverse industries including automotive, construction equipment, medical devices, and industrial machinery. Known for their innovative approach to complex fabrication challenges, the company continuously invests in new technologies and process improvements to maintain their competitive edge and meet evolving customer requirements.
The Challenge
Missed R&D Credit Opportunities
Despite significant investments in manufacturing innovation and process improvements, Precision Metal had never claimed R&D tax credits, potentially missing substantial tax savings that could fund additional growth and innovation initiatives.
Unrecognized Qualifying Activities
Ongoing process improvements, equipment modifications, and custom solution development weren't being recognized as potential R&D activities eligible for tax credits.
Inadequate Documentation
Lack of systematic documentation of innovation activities, time tracking, and project records made it difficult to substantiate potential R&D credit claims.
Complex Qualification Requirements
Understanding which manufacturing activities qualify for R&D credits and meeting IRS documentation requirements required specialized expertise.
Cash Flow Impact
Missing out on significant tax credits reduced available cash flow for reinvestment in equipment, technology, and facility improvements.
Our Comprehensive Solution
Comprehensive R&D Credit Analysis
Schapira CPAs conducted an exhaustive analysis of Precision Metal's operations, identifying and documenting qualifying R&D activities across multiple years while establishing systems for ongoing credit optimization.
Phase 1: Comprehensive Activity Assessment
Operations Analysis
- Detailed review of manufacturing processes and procedures
- Equipment modification and improvement documentation
- Custom solution development project review
Qualification Analysis
- Four-part test application for each activity
- Technical uncertainty identification
- Process of experimentation documentation
Phase 2: Documentation & Quantification
Project Documentation
Detailed records of 47 qualifying R&D projects
Cost Allocation
Precise tracking of qualifying expenses
Compliance Review
IRS audit-ready documentation
Phase 3: Credit Calculation & Filing
Credit Optimization
- Multi-year credit calculation and optimization
- Alternative Simplified Credit (ASC) analysis
- State credit opportunities identification
Implementation Support
- Amended return preparation and filing
- Ongoing documentation system establishment
- Future year planning and optimization
Outstanding Results
Exceptional R&D Credit Recovery
The comprehensive R&D credit analysis delivered substantial tax savings and established ongoing processes to maximize future credit opportunities, providing significant cash flow benefits for continued innovation investments.
Qualifying R&D Activities Identified
Process Improvements
- Welding technique optimization for exotic materials
- CNC programming efficiency improvements
- Quality control automation development
Equipment & Technology
- Custom fixture and tooling design
- Machine modification for specialized applications
- Software integration and automation systems
"We had no idea that so many of our daily improvement activities qualified for R&D tax credits. Schapira CPAs opened our eyes to opportunities we'd been missing for years. The $850,000 in recovered credits has allowed us to accelerate our equipment modernization plans and invest in additional process improvements. Even better, they've set up systems to ensure we capture these credits going forward."
Key Takeaways
For Manufacturing Companies
- Many routine improvement activities qualify for R&D credits
- Proper documentation is critical for maximizing credit value
- Multi-year analysis can uncover significant opportunities
Success Factors
- Comprehensive operational analysis and review
- Detailed project documentation and qualification
- Ongoing systems for future credit optimization
Project Summary
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Our R&D tax credit specialists have helped manufacturers recover over $15M in unclaimed credits. Many routine manufacturing improvements qualify for substantial tax savings. Let us help you identify and capture these valuable opportunities.
