How/When are clients charged & How/When do they pay?
Modified on: Fri, 10 Jun, 2016 at 2:34 PM
Clients are charged based on the Specialized Tax Incentive service that they have received a benefit from. Each service has a different billing timeframe and invoice period. You will find each service listed below:
Cost Segregation is our quickest turnaround service for specialized tax incentives. The normal turn around for a Cost Segregation Study is 4-6 weeks, this timeline is dependent upon the client's participation. The average savings for this service is $75K per every $1M in purchase / renovation costs. The client is normally charged and pays in two separate invoices.
After the client is engaged, and a benefit has been verified our staff performs a feasibility analysis that will determine a benefit. Once this feasibility analysis has been completed is the moment that client realizes their benefit. At that time, the client is invoiced for payment 1.
After payment 1 is received we continue with additional research and documentation to complete an audit defense report compilation. During this period the client is sent an Executive Summary of the final and full report. This is when the client is invoiced for payment 2.
The client does not need the full and final report to capture the benefit. The CPA is provided the preliminary information they need to plan/file on behalf of the client with the feasibility analysis and executive summary.
The R&D Tax Credit
The R&D Tax Credit is your largest commissionable and residual service. A client can do an R&D Tax Credit study for the current tax year, they can go back 3 years and most often become a residual year over year client. The average benefit to an R&D client is $20K - $40K per every $1M in company payroll. The client is normally charged and pays in two separate invoices.
After the client is engaged, and a benefit has been verified our staff begins performing the QRE Calculations (to learn more about QREs click here). During this time technical interviews take place along with additional engineering review of documentation and payroll allocation. The QRE forms and schedules are delivered to the client and the invoice for payment 1 follows shortly thereafter. This is the moment when the client realizes their benefit. During this time the Audit Defense report compilation has started. Upon completion of the Audit Defense Report, it is sent to the client and invoice for payment 2 follows within a few days.
During the report compilation process the client has already begun to submit to the IRS to claim their benefit. Many times the client has already received their physical check from the IRS before having to pay for invoice 1.
Property Tax Mitigation
Property Tax Mitigation is a service that every client paying property taxes takes advantage of. On average clients are being charged at least 15% more than they should be. Turn around for a property tax mitigation client can take anywhere from 1 - 12 months. The turnaround is all dependent upon the local municipality. Each municipality has an annual review date. On that date our property tax division submits their findings on behalf of the client. The municipality then reviews the findings and rules either in favor of the findings or not. Most often the rulings are in favor of the client.
Once the rulings have been received the client has realized their benefit. At that time the client is invoiced for 50% of the savings that they received due to the property tax mitigation.
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