FEDERAL INCOME TAX SERVICES
Section 199 (Domestic Production Activities Deduction)
All business involved in manufacturing should consider the manufacturing deduction under IRC § 199. While the deduction comes with a complex set of rules, it nonetheless represents significant tax savings for businesses performing domestic manufacturing and certain other production activities.
The scope of our services includes the following:
- Determine relevant Client facts, based upon our review of the Client’s corporate structure, operations, inter-company and third party agreements, and other relevant information (including discussions with appropriate Client personnel, if and as needed to confirm relevant facts);
- Complete a comprehensive technical analysis of the Client’s Qualified Production Activities Income (”QPAI”) position, including a technical determination of those Client transactions giving rise to “domestic production gross receipts” for QPAI purposes;
- Develop specific processes and procedures for collection and reconciliation of necessary Client sales and cost of sales data for all relevant product sales;
- Complete comprehensive QPAI calculations for purposes of the Client’s year-end financial close and using Thinkdeveloped methodologies for optimizing apportionment of cost of sales and Reg. 1.861-8 expenses taking into account any interplay and required consistency between QPAI, ETI, and the foreign tax credit;
- Document the factual, technical, and financial analyses described above in items 1 – 4 for year-end financial purposes in technical memoranda confirming our analysis, calculations, and determinations with respect to the appropriate QPAI deduction;
- Present and discuss the results of our comprehensive QPAI analysis and calculation;
- Prepare relevant Federal income tax forms and schedules for QPAI purposes;
- Prepare an appropriate “tax provision to tax return” reconciliation analysis; and
- Prepare appropriate IRS audit trail reports for QPAI purposes.
Contact us to learn more
Phone: (714) 434-6700
Fax: (714) 640-8645