The President’s Budget Proposal Attempts To Permanently Extend The Research And Experimentation Tax Credit

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Written by Peter J. Scalise | Posted in Federal • IRS • Tax Policy

President Barrack Obama unveiled his $ 3.9 trillion Fiscal Year (hereinafter “FY”) 2015 budget proposal on March 4th. The President’s FY 2015 budget proposal reflects the framework set out in his 2014 State of the Union Address to promote job creation and economic growth. Clearly, the Research and Experimentation Tax Credit (hereinafter “RTC”) was a focal point of his budget as the RTC recently expired on December 31, 2013. It should be duly recalled that the RTC was originally added to the Internal Revenue Code (hereinafter “the Code”) in 1981 as a temporary provision of the Code at a time when research and experimentation based jobs were alarmingly declining in the United States and the RTC was designed to stimulate job growth and investment within the United States and its possessions (e.g., Puerto Rico and Guam).

The President’s FY 2015 budget proposal would make the RTC permanent for expenditures after December 31, 2013, and would increase the rate of the alternative simplified credit methodology. Practically speaking, by making the RTC permanent it would be highly beneficial to business entity taxpayers as it would afford greater certainty to their overall business planning (e.g., considering further and perhaps increased investment in research and development within the United States). However, identifying an appropriate revenue offset to make the provision permanent has been a recurring issue in Congress for decades. The extension of the RTC is highly probable due to the overwhelming support of the RTC on both sides of the aisle. However, making the RTC permanent is only likely if rolled into a larger tax reform bill.

Join Peter J. Scalise on March 25th from 2:00PM EDT – 3:00PM EDT for his complimentary and highly acclaimed webinar entitled “A Practical Guide to Identifying, Gathering, and Documenting a Sustainable Research Tax Credit Claim”. Please register today utilizing the subsequent link:

https://www4.gotomeeting.com/register/894320791

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Peter J. Scalise

Peter J. Scalise serves as the Federal Tax Credits & Incentives Practice Leader for Prager Metis CPAs, LLC a member of The Prager Metis International Group. Peter is a highly distinguished BIG 4 Alumni Tax Practice Leader and has approximately twenty years of progressive public accounting experience developing, managing and leading multi-million dollar tax advisory practices on both a regional and national level.

Peter is a highly acclaimed thought leader in the fields of accounting and taxation with deep subject matter expertise in connection to designing, implementing and defending sustainable methodologies for specialty tax incentives including, but not limited to, research tax incentives; orphan drug credits; therapeutic discovery credits; accounting methods and periods; energy tax incentives in connection to green building envelope efficiency and benchmarking, solar energy, bio energies, fuel cells, wind turbines, micro turbines, and geothermal systems; and comprehensive fixed asset analysis incorporating principles of construction tax planning, cost segregation analysis and the final treasury regulations governing tangible property.

Peter is a renowned keynote speaker and an extensively published author on specialty tax incentives, tax controversy matters, and legislative updates from Capitol Hill for NAREIT, AGRION, USGBC, AICPA, ASTP, NATP, ABA, AIA, and TEI. Peter serves as a member of the Tax Faculty for CPAacademy, iShade and TaxConnections University (“TCU”). Peter serves on both the Board of Directors and Board of Editors for The American Society of Tax Professionals (“ASTP”) and is the Founding President and Chairman of The Northeastern Region Tax Roundtable.