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Business Credit Provisions in the Small Business Jobs Act of 2010: Giving New Life to the R&D Credit

Product Code - TMAU81
Speaker(s): Jim Ramstad, Dean Zerbe, David Ji, Ben Yaker
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The credit for increasing research activities (“R&D credit”) is one of the most popular incentives in the tax code. However, IRC Sec. 38(c) places significant limitations on the utilization of the R&D credit, in many cases requiring taxpayers to carry forward their credits for years before ever using the credit to reduce tax liability. The effect of the 38(c) limitations is to greatly reduce the effect of what should be a powerful incentive.

A new provision in the soon to be enacted Small Business Jobs Act of 2010 eliminates some of the 38(c) limitations for small businesses and allows them to use the credit against AMT. Another provision in the bill allows small businesses to improve their utilization of 2010 R&D credits by carrying them back 5 years. These important provisions have been comparatively under-publicized in a bill that has received a significant amount of attention.

This webinar details the proposed provisions and the effect that they will have on small businesses seeking to take advantage of the R&D credit.

Presentation Objectives:

The objectives of this 40-60 minute audio discussion include providing participants with a conceptual understanding and practical application of the following:

• Basic Structure of the R&D credit.

• Limits on taxpayer utilization.

• Background of Small Business Jobs Act of 2010.

• Elements of the AMT utilization provision.

• Elements of 5-year carryback provision.

• Qualification requirements for eligible small businesses.

• Overall impact of the bill on small businesses.

Upon completion of this program, participants will be able to:

• Understand and apply the business credit provisions of the Small Business Jobs Act of 2010.

• Determine whether a business qualifies as an eligible small business.

• Better evaluate the extent to which a taxpayer will be able to utilize R&D credits.

Jim Ramstad, Dean Zerbe, David Ji, Ben Yaker

Dean Zerbe is National Managing Director for alliantgroup and is based out of alliantgroup’s Washington D.C. office. In this role, Dean is responsible for, among other things, monitoring tax-related legislative activity in Washington to help keep our clients and staff informed and help direct alliantgroup’s service offerings to ensure we are meeting client needs.

Prior to joining alliantgroup in February, 2008, Dean was Senior Counsel and Tax Counsel to the U.S. Senate Committee on Finance, where he worked closely with the Chairman (and currently Ranking Member) of the Finance Committee, Senator Charles Grassley (R-IA) on tax legislation. During his time on the Finance Committee, Dean was intimately involved with almost every major piece of tax legislation that was signed into law – including the 2001 and 2003 tax reconciliation bills (representing two of the largest tax cuts in the nation’s history); the JOBS bill in 2004 (corporate tax reform); and, the Pension Protection Act.

Jim Ramstad is a Senior Advisor for alliantgroup, based out of Minnesota, and served as a Member of Congress from Minnesota from 1991 until 2009. He was a Member of the House Ways and Means Committee, Health Subcommittee, and Ranking Member of the Oversight Subcommittee. Jim also co-chaired the Addiction Treatment and Recovery Caucus, Disabilities Caucus, Law Enforcement Caucus, and Medical Technology Caucus.

Former Congressman Ramstad was chief co-sponsor of the landmark Mental Health and Addiction Treatment Parity Act, which became law in 2008. Jim was named “Legislator of the Year” by the National Association of Alcoholism and Drug Addiction Counselors in 1998, by the National Mental Health Association in 1999, and by the National Association of Police Orga¬nizations in 1997 and 2000. Ramstad is also the 1998 recipient of the Fulbright Distinguished Public Service Award.

David Ji is a Managing Director at the Houston national office with extensive academic and industrial experience in the fields of finance and bio-engineering. He is head of the firm’s Life Science Group, part of alliantgroup’s Industry Specialization Program. Prior to joining alliantgroup, David worked on cutting-edge research in the arenas of developmental biology and gene therapy as a research and bioanalytical scientist. David also served as a Senior Analyst for the corporate development and strategy group of a regional firm. His research and technical background, together with his business analyst training, gives him a unique combination of skills that allow him to identify and capitalize on tax incentives for a wide variety of business enterprises.