HPG Outlines Tax Credit Application Process

May 24, 2010 - PRLog -- RALEIGH, N.C. (May 24, 2010)—The IRS has published Notice 2010-45 (http://www.irs.gov/pub/irs-drop/n-10-45.pdf) providing additional guidance for taxpayers interested in applying for benefits under IRC Sec. 48D, the Qualifying Therapeutic Discovery Project Tax Credit. Senior Tax Manager Lance Hardin of Hughes Pittman & Gupton, LLP (www.hpg.com), the largest CPA firm headquartered and staffed in the Research Triangle Park region of North Carolina, highlights some of the major points.

Timing:
• Application form will be released no later than June 21, 2010 on the IRS website
• Application deadline is July 21, 2010
• Preliminary review to determine eligibility will be by September 30, 2010
• The IRS will have 30 days beginning on October 1, 2010 to approve or deny the application
• Treasury will authorize payment to approved applications for 2009 tax year projects no later than October 29, 2010

Funding Limitations:
• No company will receive more than $5M, in total, regardless of the number of projects
• Those projects that the IRS deems to have the "greatest potential" to create or sustain U.S. jobs or advance U.S. competitiveness
• Grant-funded project costs qualify, unless the grant was excludable from taxable income under IRC Sec. 61
• Facilities costs, such as rent, mortgage, insurance, and maintenance, do not qualify

Application Process:
• Applications will be on a project-by-project basis – companies can submit multiple applications
• Use Form 8942 "Application for Certification of Qualified Investments Eligible for Credits and Grants under the Qualifying Therapeutic Discovery Project Program"
• Companies desiring the grant in lieu of the tax credit must indicate such on Form 8942
• Grant elections must include a DUNS number and the taxpayer must be registered on the Central Contractor Registration

This is a summary of key points and does not constitute all the requirements to claim a benefit under IRC Sec. 48D. Interested taxpayers should consider how the complete guidance applies to their individual facts and circumstances and are urged to seek professional guidance as necessary.

“It is important for companies to focus on their justification for the tax credit based on ‘unmet need’ and the impact it will have to society,” says Christy Schafer, Ph.D., former CEO of Inspire Pharmaceuticals and member of the Emerging Company Section of the BIO board.

Poised to assist companies in applying for the credit, HPG offers a menu of services that include:
• A cost-effective initial evaluation to determine project and company eligibility
• As-needed consultations regarding interpreting qualifications, specific issues and/or program developments
• Services involving collection of data and supporting quantitative materials; determination of eligible costs
• Drafting or review of application verbiage
• Preparation or review of application prior to submission
• Evaluating how your project meets the qualification criteria, and why your project should receive priority in the selection process

Additionally, firm partners have been working with the North Carolina Biotechnology Center to make available the necessary economic impact statistics needed to address application criteria regarding job creation and sustainability. For more information on applying for the credit contact Hardin at lhardin@hpg.com or call (919) 232-5900.

About Hughes Pittman & Gupton, LLP (HPG):
HPG is the largest CPA firm headquartered and staffed in the Research Triangle Park region of North Carolina, as ranked by the Triangle Business Journal. More than just an accounting firm, HPG assists clients in looking beyond the bottom linesm by being the right people, right value and right firm to achieve each client's definition of success. HPG is a member of CPAmerica International and affiliated with the Horwath alliances of firms, with offices worldwide. The firm leverages this to provide national and global accounting resources to its clients. HPG offers a wide array of business accounting, auditing, corporate tax and management advisory services. Specialties include serving owner-managed, investor-backed technology and life science organizations, healthcare services, real estate development, manufacturing and distribution businesses, as well as providing ERISA audits, family wealthcare services and Sarbanes-Oxley internal audit services.

HPG has remained committed to advancing a thriving Triangle community since its founding in 1983. In recognition, the firm is the recipient of two Pinnacle Business Awards by the Greater Raleigh Chamber of Commerce; the 2009 Large Entrepreneurial Business Award and the 2010 Integrity in Business Award. Several HPG partners are also the recipients of excellence awards, including the CED Outstanding Service and Entrepreneurial awards, Business Leader Magazine's Impact Financial Leader and Dealmaker recognitions, and the Triangle Business Journal's 40 Under 40 and Women in Business awards. Visit www.HPG.com.



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Mike Gauss
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