Before You Trust R&D Tax Credit Software, Do This - Episode 12
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AI R&D Tax Credit Tools vs. Defensible Studies: 5 Questions to Ask Before You File (Form 6765)
The episode explains that R&D tax credit software and AI tools can quickly organize financial data and produce a rough estimate, but often fail to justify why costs qualify or to provide the documentation the IRS increasingly expects, especially with evolving business-component-level reporting on Form 6765. It contrasts a simple software output with a holistic credit study that includes forms, a credit summary, methodology memo, and narratives tying costs to specific projects, uncertainties, experimentation, and source records. Using contract spend as an example, it highlights pitfalls like the 65% contractor adjustment, offshore labor hidden behind a US invoice, and customer-funded work affecting rights and risk.