Archive for the ‘Informative Articles’ Category
New Administrative Authority Issued in connection to the Tax Treatment of Repair & Maintenance Expenditures
By Peter J. Scalise, B.S., M.S.
On April 30 of 2013, the Internal Revenue Service (hereinafter “the Service”) issued Rev. Proc. 2013-24, providing guidance pursuant to the Industry Issue Resolution Program (hereinafter “IIR Program”) for taxpayers that have a depreciable interest in steam or electric power generation property primarily used in the trade or business of generating or selling steam (e.g., or steam in the form of heat) or electricity.
Rev. Proc. 2013-24, Appendix A also provides safe harbor definitions of “units of property” and “major components” that may be used by taxpayers to determine whether expenditures to maintain, replace, or improve steam or electric power generation property must be capitalized under I.R.C. § 263(a).
Rev. Proc. 2013-24 further encompasses:
- Procedures for obtaining automatic consent to change to a method of accounting that uses all, or some of, the safe harbor definitions of “units of property” provided within Appendix A; and
- An extrapolation methodology within Appendix B outlines that an eligible taxpayer may use in connection with a change in method of accounting for determining the amount of an I.R.C. § 481(a) adjustment.
The scope and application of Rev. Proc. 2013-24 is effective for tax years ending on or after December 31, 2012.
Scope and Application of New Administrative Authority
Rev. Proc. 2013-24 applies to a taxpayer that has a depreciable interest in steam or electric power generation property primarily used in the trade or business of generating or selling steam (e.g., or steam in the form of heat) or electricity. The subsequent attributes should be duly noted and strictly adhered to:
- It only applies for property defined in Appendix A of Rev. Proc. 2013-24;
- It does not apply to property used to produce electricity from alternative energy sources such as wind; or
- A determination of whether a taxpayer is within the scope of this revenue procedure is made by each member of a consolidated group, by a partnership, or by an S corporation.
Practically speaking, the Service issued Rev. Proc. 2013-24 to reduce the number of disputes regarding the deductibility or capitalization of expenditures to maintain, replace, or improve generation property. If a taxpayer uses the safe harbor definitions of “unit of property” and “major component” provided by Rev. Proc. 2013-24, this treatment will not be challenged by the Service.
Rev. Proc. 2013-24 describes and includes examples of “generation property” (i.e., as well as units of property and major components of generation property) and power stations.
Accounting Method Change Alert
Rev. Proc. 2013-24 provides that a change by a taxpayer to use the “units of property” and “major components” definitions is a change in method of accounting, and that a taxpayer seeking such a change must use the automatic change in method of accounting provisions in Rev. Proc. 2011-14 (e.g., or successor guidance).
In connection to the extrapolation methodology, Rev. Proc. 2013-24 explains that taxpayers may extrapolate their results to determine the I.R.C. § 481(a) adjustment amount for certain years by following the process provided in Appendix B.
Rev. Proc. 2013-24 also includes specific rules concerning changes in the method of accounting for taxpayers in the business of generating steam or electric power, by adding new section 3.20 to the appendix of Rev. Proc. 2011-14. The new automatic procedure provides, among other things, that the scope limitations in section 4.02 are waived for a taxpayer that changes to the method of accounting provided in Rev. Proc. 2013-24 for its first, second, or third tax year ending after December 30, 2012, and that a taxpayer must take the entire net I.R.C. § 481(a) adjustment into account (e.g., whether positive or negative) in computing taxable income in the year of change.
Rev. Proc. 2013-24, which was issued pursuant to the Service’s IIR Program, reflects a focused effort on the part of the Service and affected taxpayers in the electric utility industry to resolve subjective issues arising under I.R.C. § 263(a). As with other IIR safe harbor guidance, although Rev. Proc. 2013-24 provides safe harbors that affected taxpayers are not required to use, the Service anticipates that taxpayers will follow Rev. Proc. 2013-24 to minimize tax controversy issues described in this new administrative authority.
About the Author
Peter J. Scalise serves as the National Partner-in-Charge and the Federal Tax Practice Leader for Engineered Tax Services. Peter is a highly distinguished BIG 6 Alumni Tax Practice Leader and a noted thought leader in the accounting profession. Peter serves on both the Board of Directors and Board of Editors for The American Society of Tax Professionals (“ASTP”). Peter is also the Founding President and Chairman of The Northeastern Region Tax Roundtable, an Operating Division of ASTP. Peter is a volunteer member of the iShade Tax Faculty and a frequent keynote speaker for the AICPA, ABA, ASTP, NAREIT, NATP, TEI & AIA on specialty tax incentives, tax controversy matters and legislative updates from Capitol Hill.
Engineered Tax Services (ETS) had another successful reading workshop with the students of Roosevelt Elementary School. After the Newtown tragedy, ETS developed a long-term relationship with Roosevelt Elementary School in West Palm Beach, FL. This relationship allows us to give on a local level to a school with children in great need! ETS has been working with the kids as reading buddies while donating items such as socks, shirts, pencils, paper, crayons, and notebooks.
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Here at ETS we strive to provide you and your firm with the most relevant information, industry news, tax alerts, and marketing techniques to further your success. We hope that our partnership with “Marketri” will add value and expertise to you and your team. Wishing you continued success in 2013!
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The U.S. General Services Administration (GSA) has published a request for comment on which green building rating systems should be used by the federal government.
Every five years, the GSA is required to evaluate green building certifications for government use and offer recommendations to the U.S. Department of Energy (DOE). To date, the DOE has not chosen a certification standard.
The GSA is recommending a choice from three certification standards: Green Building Initiative’s Green Globes, the U.S. Green Building Council’s Leadership in Energy and Environmental Design, and the International Living Building Institute’s Living Building Challenge. The GSA will accept public comments until April 1.
A Practical Guide to Identifying, Gathering, and Documenting a Sustainable Research Tax Credit Claim
The Research and Experimentation Tax Credit (hereinafter “RTC”) was added to the Internal Revenue Code (hereinafter “the Code”) in 1981 as a temporary provision at a time when research and development based jobs were significantly declining in the United States due to these jobs being moved overseas where labor rates and overall operating costs were considerably less. For this very reason, the RTC was introduced into the Code to motivate business entity taxpayers to incur qualifying research and development expenditures with the high expectations that such an advantageous tax incentive would facilitate in stimulating job growth and investment in the United States and prevent further jobs from going overseas.
Although passed into law in 1981 as a temporary provision within the Code, the RTC has successfully been extended over the past thirty two years with only one exception. For those historically familiar with the RTC, it should be duly recalled that only once from July 1, 1995 through June 30, 1996 was there a “gap” from when the RTC expired and when it was reinstated without being retroactively applied since the RTC’s inception. The RTC was recently extended for a two year period through The American Taxpayer Relief Act of 2012 resulting in the RTC being retroactively reinstated to cover calendar year 2012 and prospectively extended to cover calendar year 2013.
While the RTC serves as a highly valuable tax incentive for business entities conducting qualified research activities it is imperative that the RTC be methodically documented from both a qualitative and quantitative perspective to ensure a sustainable result on Internal Revenue Service (hereinafter “the Service”) examination. It is critical that the design, implementation and execution of the methodology for the RTC analysis be in full compliance with all applicable statutory, administrative and judicial interpretations. This article will serve as a practical guide to identifying, gathering and documenting a sustainable RTC claim.
Identifying Qualified Research Activities (QRAs)
In order to identify and qualify research and experimentation activities for purposes of the RTC the subsequent four criteria must be satisfied and documented on a contemporaneous basis as set forth pursuant to I.R.C. § 41(d) and Treas. Reg. § 1.41-4:
Technological in Nature Requirement
The research must be undertaken for the purposes of discovering information that is technological in nature. As provided in Treas. Reg. § 1.41-4(a)(4), information is technological in nature if the process of experimentation used to discover such information fundamentally relies on principles of the physical or biological sciences, engineering, or computer science. A taxpayer may employ existing technologies and may rely on existing principles of the physical or biological sciences, engineering, or computer science to satisfy this requirement. The regulations further provide that a taxpayer need not seek to obtain information that exceed, expands or refines the common knowledge of skilled professionals in the particular field of science or engineering, nor is the taxpayer required to succeed in developing a new or improved business component as set forth under Treas. Reg. § 1.41-4(a)(3)(ii).
Process of Experimentation Requirement
Substantially all (i.e., meaning 80% or greater) of the activities must constitute, or be deemed to constitute, elements of a process of experimentation for a qualified purpose pursuant to I.R.C. § 41(d)(1)(3). As clarified in Treas. Reg. § 1.41-4(a)(5), a process of experimentation “is a process designed to evaluate one or more alternatives to achieve a result where the capability or the method of achieving the result, or the appropriate design of that result, is uncertain as of the beginning of the taxpayer’s research activities.”
The so-called “core elements” of a process of experimentation require that the taxpayer (i.e., either directly or through another party acting on its behalf):
- Fundamentally rely on principles of the physical or biological sciences, engineering, or computer science;
- Identify uncertainty concerning the development or improvement of a business component;
- Identify one or more alternatives intended to eliminate that uncertainty; and
- Identify and conduct a process for evaluating the alternatives.
The regulations provide that such a process may involve, for example, modeling, simulation, or a systematic trial and error methodology. The regulations under Treas. Reg. § 1.41-4(a)(5) further provide: “A process of experimentation must be an evaluative process and generally should be capable of evaluating more than one alternative.”
Technical Uncertainty Requirement
Expenditures attributable to research activities must be eligible to be treated as research expenses under I.R.C. § 174. As described under Treas. Reg. § 1.174-2(a), expenditures are costs “incurred in connection with the taxpayer’s trade or business that represent research and development costs in the experimental or laboratory sense.” Pursuant to I.R.C. § 174(c), expenditures generally include all costs incident to the development or improvement of a product, but not expenditures for the acquisition or improvement of land or depreciable property.
Permitted Purpose Requirement
A process of experimentation is conducted for a qualified purpose if the research relates to:
- A New or Improved Function;
- Increased Performance;
- Enhanced Reliability; or
- Enhanced Quality.
Pursuant to I.R.C § 41(D)(3), research is not considered to be conducted for a “qualified purpose” if it relates to style, taste, cosmetic, or seasonal deign factors commonly referred to as mere aesthetics.
Identifying, Gathering and Documenting QRAs
The aforementioned requirements described above are applied separately to each business component. Noting, I.R.C. § 41(d)(2)(c) provides that any plant, process, machinery, or technique for commercial production of a business shall be treated as a separate business component, and not as part of the business component (i.e., inventory) being produced. In cases involving development of both a product and a manufacturing process improvement for that product, research activities relating to the product are not “qualified research” unless the requirements described above are met for the research activities to the product without taking into account the activities related to their development of the manufacturing process improvement as discussed under Treas. Reg. § 1.41-4(b).
Treas. Reg. § 1.41-4(a)(6) provides that, if 80% or more of a taxpayer’s research activities with respect to a business component constitute elements of a process of experimentation for a qualified purpose, the substantially all requirement is satisfied even if the remaining 20% or less of a taxpayer’s research activities with respect to that business component does not constitute elements of a process of experimentation for a qualified purpose. However, in no event may activities be treated as “qualified research” if such activities do not fall within the scope of I.R.C. § 174 or if such activities are specifically excluded under I.R.C. § 41-(d)(4).
If the requirement of qualified research cannot be satisfied when applied first at the level of the product or process that is to be held for sale, lease, or license, or used by the taxpayer in its own trade or business, then such requirements should be applied at the most significant subset of elements of the product or process. This “shrinking back” of the business component is continued until either a subset of elements of the business that satisfies the requirement of “qualified research” is reached, or the most basic element of the product is reached and the requirements of “qualified research” are not met as set forth under Treas. Reg. § 1.41-4(b)(2). To that end, even though a taxpayer’s research activities, viewed in their entirety, for a new or improved product (i.e., an aircraft) may not satisfy the “substantially all” test or other requirements for “qualified research”, activities related to developing or improving a portion of the product (i.e., the flight actuation system) may still be eligible for the RTC.
Statutorily Excluded Activities
I.R.C. § 41(d)(4) specifically excludes the subsequent activities from being treated as “qualified research” and therefore are ineligible for the RTC.
Research After Commercial Production
Activities conducted after the beginning of commercial production of a business component generally do not constitute qualified research if such activities are conducted after the component is developed to the point where it is ready for commercial sale or use. However, even after a product meets the taxpayer’s basic functional requirements, activities relating to the manufacturing process still may constitute qualified research under Treas. Reg. § 1.41-4(c)(2).
Adaptation of Existing Business Component
Activities related to adapting an existing business component to a particular customer’s requirements are ineligible for the RTC. As set forth under Treas. Reg. § 1.41-4(c)(3), this exclusion does not apply, however, merely because a business component is intended for a specific client.
Duplication of Existing Business Component
As illustrated under Treas. Reg. § 1.41-4(c)(4), qualified research does not include activities relating to reproducing an existing business component (i.e., reverse engineering) from a physical examination of the component itself or from blueprints and / or detailed specifications drawings.
Surveys and Studies
Excluded from qualified research are activities in connection to:
- Efficiency Surveys;
- Management Functions or Techniques;
- Market Research;
- Routine Data Collections; and
- Ordinary Testing or Inspections for Quality Control.
Research conducted outside the United States or its possessions such as Puerto Rico and Guam may not be treated as qualified research.
To the extent research is funded by another person or government entity (i.e., by grant, contract, or otherwise), such research may not be treated as qualified research. There are limited exceptions to this rule in cases where overtures are incurred that are not funded. For example, if an Aerospace Company had a Cost Plus Contract with a client and was funded up to $ 5 Million to develop a flight actuation system and that aerospace company incurred $ 6 Million to develop the flight actuation system then the $ 1 Million overture could potentially be claimed as part of RTC assuming the aerospace company had substantially all of the rights to the research (i.e., not needing to make a royalty payment to use that technology in the future) and had the economic risk of loss.
Identifying, Gathering and Documenting Qualified Research Expenditures (QREs)
Expenditures that qualify for the RTC generally include: (1) in-house research expenses for wages paid to employees for the performance of “qualified services”; (2) amounts paid for supplies used in the performance of qualified services; and (3) certain “qualified research expenses” paid to third parties. The term “qualified services” includes the services of employees who are actually engaged in qualified research and the services of employees who are engaged in direct support or the first level of research activities that constitute qualified research.
Compensation for the performance of qualified research services should include only compensation treated as wages for income tax withholding purposes. Therefore, in addition to regular wages, the allocation of compensation to research projects should include bonuses and the compensation element recognized on the exercise of nonqualified stock options, but should not include payments to qualified pension and profit sharing plans, including employee I.R.C. § 401(k) contributions and nontaxable fringe benefits. Practically speaking, you should be including each employee wage as documented on Form W-2, Box 1 and then multiplying it by a direct qualifying labor wage percentage. This direct qualifying labor wage percentage, for each person, should be calculated as a numerator that is directly tied to qualifying research projects by hour and a fixed denominator of 2,080 hours which can be further reduced for paid holidays and vacation / sick time. It is imperative to ensure proper and clear nexus between QRAs and QREs at this stage so that an IRS Agent is able to see the link between qualified research hours by project to person to expenditures.
In addition, it should be duly noted that under a special safe-harbor rule, if at least 80% of the services performed by an employee during the taxable year constitute “qualified services”, then all 100% of services performed by the employee during the taxable year may be treated as “qualified services”. In all cases, each employee and title / rank within the company should also be documented so that an IRS agent can determine at a high level whether that employee was supervising the research (i.e., Oncology Practice Leader), conducting the research (i.e., Bio-Chemist Researcher), or supporting the research (i.e., Lab Technician supporting oncology experimentation). It should be noted, however, that employee’s titles are not exclusive indicators in determining whether the activities performed by that employee qualify for the RTC.
In general, QRE Supply costs can be claimed if the supplies are consumed or destroyed in the research process. The term “supplies” is broadly defined to include any tangible property, other than land, improvements to land, and depreciable property. Expenditures for supplies that are indirect research expenditures or general and administrative expenses do not qualify as in-house research expenses. For example, amounts paid for electricity used for general laboratory lighting are treated as general and administrative expenses, although amounts paid for electricity used in operating high-energy equipment for qualified research (e.g., such as a laser for nuclear research) may be treated as expenditures for supplies in the conduct of qualified research as illustrated under Treas. Reg. § 1.41-2(b)(2)(ii).
QRE Contract Research
The amount of third party contractor costs eligible for the RTC is computed at 65%, or 75% in cases for payments to select research consortia’s, of amounts paid to persons other than employees for services that, if performed by an employee, would constitute qualified services under I.R.C. § 41(b)(3) and Treas. Reg. § 1.41-2(e)(1). Additionally, contract research performed on behalf of a taxpayer is qualified research only if incurred pursuant to an agreement (i.e., either oral or written), entered into prior to the performance of the research, and requiring the taxpayer to bear the expenses even if the research is not successful. Any payment made by the taxpayer to a third party which is contingent upon the success of the research is considered to be paid for the product or result rather than the performance of the research, and thus, may not be treated as qualified research expenses under Treas. Reg. § 1.41-2(e)(2).
Gathering Contemporaneous Documentation to Support the RTC
As set forth pursuant to Treas. Reg. § 1.41-4(d), taxpayers must retain records in sufficiently usable form (i.e., in an audit friendly format per the IRS Audit Technique Guidelines for research tax credit claims) and detail to substantiate claimed QREs (i.e., Wages, Supplies, & Contract Research) and QRAs (i.e., at the project level). To that effect, it is critical that sufficient contemporaneous documentation be identified, gathered, properly compiled and retained as forms of substantiation documentation to assist in ensuring that the Service does not disallow the merits of the RTC claim should an examination come to fruition.
In cases in which a company is government regulated such as with Life Science companies (i.e., Pharmaceuticals, Bio-Technology & Medical Devices) then the FDA record keeping requirements can be leveraged to support research activities. Another example, with Aerospace & Defense companies then the FAA and DCAA record keeping requirements can also be leveraged to support the research activities. In cases, where companies apply for a patent or have a patent granted then these forms of contemporaneous documentation serve as the strongest forms of qualified research documentation due to the inherently arduous process to apply for a patent.
From a Best Practice Tax Controversy Perspective, the subsequent list of forms of contemporaneous documentation provides several examples of key documents that the Service typically requests to review during the course of an examination including:
- Complete Project Lists identifying the Full Scope of Research Based Projects vs. the Actual Claimed Research Projects after Conducting Systematic Project Based Interviews;
- Patents or Patent Applications;
- Annual R&D or Technology Plans;
- Research Project Authorization Requests;
- Internal and External Correspondence on R&D;
- Design Requirements or Functional Specifications;
- Testing Scripts or Testing Logs;
- Modifications Reports or Error Logs;
- Technical Reports or Plans;
- Laboratory Notebooks;
- Ingredient Consumption Worksheets; and / or
- Raw Material Usage Records.
I highly recommend that the more contemporaneous documentation from the aforementioned list that can be obtained should be obtained and meticulously compiled in an audit-ready format as it will incontestably assist in strengthening the merits of the RTC claim and overall RTC filing position (i.e., always strive for “More Likely Than Not” or higher, but never file a claim unless you can get at least to “Substantial Authority”).
From a risk management perspective, in order to mitigate or avoid income tax return paid preparer penalties pursuant to I.R.C. § 6694 (i.e., penalties that are assessed on both paid tax return preparers and tax advisers that are deemed paid tax return preparers due to their consulting on matters that constitute a substantial portion of their client’s tax returns even if they were not engaged to prepare nor review the tax return), a “More-Likely-Than-Not” standard should be satisfied. The subsequent standards of the applicable levels of opinions should be scrupulously analyzed when assessing your RTC filing position:
- “Will” Standard: Generally, a 95% or greater probability of success if challenged by the IRS. A “Will” opinion generally represents the highest level of assurance that can be provided by an opinion;
- “Should” Standard: Generally, a 70% or greater probability of success if challenged by the IRS. A “Should” opinion provides a lower level of assurance than is provided by a “Will” opinion, but a higher level of assurance than is provided by a “More-Likely-Than- Not” opinion;
- “More-Likely- Than- Not” Standard: A greater than 50% probability of success if challenged by the IRS. The “More-Likely-Than-Not” standard is the highest level of accuracy required for purposes of avoiding the accuracy-related penalties under I.R.C. 6662A;
- “Substantial Authority” Standard: Typically, greater than a “Realistic Possibility of Success” standard and lower than “More-Likely-Than-Not” standard (i.e., 40% probability of success);
- “Realistic Possibility of Success” Standard: Approximately a one-in-three or greater possibility of success if challenged by the Service;
- “Reasonable Basis” Standard: Significantly higher than the “Not Frivolous” standard (i.e., that is, not deliberately improper) and lower than the “Realistic Possibility of Success” standard. The position must be reasonable based on at least one tax authority that can be cited as valid legal authority;
- “Non-Frivolous” Standard: Approximately a 10% chance of being upheld upon examination by the Service and accordingly under no circumstance should a tax professional ever render services with this level of comfort; and
- “Frivolous” Standard: Approximately a percentage less than a 10% chance of being upheld upon examination by the Service and accordingly under no circumstances should a tax professional ever render services with this level of comfort.
It should be duly noted that each of the aforementioned standards above has a relevant meaning to both the taxpayers and tax professionals when evaluating a tax position and the related disclosure requirements. Noting, the percentages listed for “More-Likely-Than-Not” and “Realistic Possibility of Success” are specifically provided for and discussed in the treasury regulations. In contrast, the percentages for “Substantial Authority”, “Reasonable Basis”, “Non-Frivolous”, “Frivolous” have been developed based upon their relative importance in the hierarchy of standards of opinion as primarily provided for in congressional committee reports. Moreover, while not scientifically calculable, the percentages are still practical in demonstrating the relative strength of one level as opposed to another level.
When identifying, gathering, and documenting a RTC claim, both from a qualitative and quantitative perspective, be sure to adhere to all applicable statutory, administrative and judicial interpretations and consult a true subject matter expert in this area to ensure a strong tax return filing position and a sustainable result upon IRS examination.
About the Author
Peter J. Scalise serves as the National Partner-in-Charge and the Federal Tax Practice Leader for Engineered Tax Services. Peter is also a highly distinguished member of both the Board of Directors and Board of Editors for The American Society of Tax Professionals and is the Founding President and Chairman of The Northeastern Region Tax Roundtable, an Operating Division of ASTP.
The article is designed to provide authoritative information on the subject matter covered. However, it is distributed with the understanding that the publisher, editors, and authors are not engaged in rendering legal, accounting, or other related professional services for your client base. Consequently, it is your responsibility to exercise all of the necessary measures to ensure proper tax preparation and tax advisory services for your client base.
Circular 230 Disclaimer
Circular 230 Notice: In compliance with U.S. Treasury Regulations, the information included herein (or in any attachment) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of i) avoiding penalties the IRS and others may impose on the taxpayer or ii) promoting, marketing, or recommending to another party any tax related matters.
Billy Crystal said it best, “Change is such hard work.” But oh how satisfying it is when the change you make leads to the success you seek.
One of the most profound changes firms can make is in the way they look at the market. Historically accountants develop an offering, and then present it (“Tah-dah!”) on a silver platter to buyers whom, we hope, want and need it.
I propose a different approach, looking at the market from the outside in. It’s a way of seeing things from the eye of a potential buyer rather than from your eyes.
The concept involves strategically assessing the needs of a target market, then aligning your services to those needs.
It’s more than a subtle change in semantics. Looking from the outside in represents a 180-degree change in perspective. Developing service lines and industries/buyer groups that respond to market needs gives you distinct advantage over firms offering generic inside-out services to every and all buyers.
The “outside in” dynamic is supported by a simple graphic to illustrate the strategic elements of growth. Picture three circles aligned horizontally with arrows between them, from left to right.
The far left circle represents services you should provide. The middle circle is the distribution channels that help you and buyers find each other. And the far right circle is the targeted buyer group for those services.
Changing the service or buyer group necessarily changes the distribution channel. If we develop a new service, the distribution channels could change. That’s because the new service may be of greater interest to a different buyer group than past offerings. And different buyer groups have different channels.
Here’s a case in point. Firm Z has traditionally done financial statement audits for construction companies, and their most powerful distribution channel is sureties and brokers.
Having made a decision to start looking at its opportunities from the outside in, Firm Z studies the marketplace and identifies a need among contractors for forensic services.
Such services may not be of interest to sureties, which were the distribution channel for audits. But forensic services could be of considerable interest to a new distribution channel, such as lawyers defending contractors.
The content of the three strategic circles is dynamic and will change as your firm’s approach to growth matures.
Where Do I Start?
To fully leverage the potential of “outside in” thinking, it’s essential to start fresh. Wipe off your mental white board of misconceptions and take a new look at the marketplace.
Uncover unmet need by talking to your potential buyers. Conduct focused Research CallsSM and interviews to discover the top issues facing a buyer community. It’s only by talking with a critical mass of individuals that themes will begin to emerge. That’s when you know you’re getting insight into the buyer group, not just a handful of individuals. The interview reveals the need and the need reveals the service.
You can also learn a lot about your buyers by talking with different groups about the same offering. If your interest is in valuation and litigation support, conducting interviews with two different buyer groups can lead you to two very different potential service lines.
For example, a business owner may tell you that he or she wants a quick and dirty determination of value, while divorce attorneys need assistance in valuing assets in divorce proceedings. Armed with information about their needs, determine which buyer groups are of interest based on those you’ve served in the past, and/or those you wish to serve in the future.
Fresh Eyes Yield Fresh Opportunities
The days of deciding on a specialty, hanging out a shingle and hoping someone walks in the door are over. Today’s competitive conditions require a more focused approach.
Firms can no longer sustain long-term growth with generic offerings. Instead, you need to align your expertise with demonstrated need.
It’s a breakthrough in thinking that just might yield the breakthrough in growth your firm seeks.
View original article here
By Gale Crosley, Crosley Company
About the Author:
Gale Crosley, CPA, was selected one of the Most Recommended Consultants in the Inside Public Accounting BEST OF THE BEST Annual Survey of Firms for nine consecutive years, and one of the Top 100 Most Influential People in Accounting by AccountingToday for seven consecutive years. She is an honors accounting graduate from the University of Akron, Ohio, winner of the Simonetti Distinguished Business Alumni Award, and an Editorial Advisor for the Journal of Accountancy. Gale is founder and principal of Crosley+Company, providing revenue growth consulting and coaching to CPA firms. She brings more than 30 years of experience, featuring a unique combination as a practicing CPA in two national accounting firms, along with significant experience in business development in the cutting edge technology environment with such firms as IBM and MCI.
Energy Department Announces $12 Million to Bring Cost-Competitive Solar Technologies from Lab to Market
As part of the Energy Department’s SunShot Incubator Program, the Department today announced the availability of $12 million to accelerate solar energy innovation that reduces manufacturing, installation, and permitting costs for American homes, businesses, and utilities. This new funding opportunity expands on previous Solar Incubator rounds to support both hardware efficiency and soft cost reduction goals, while helping companies transition lab-scale ideas to prototype phases or move early-scale projects to commercial launch.
The Energy Department’s SunShot Incubator Program helps launch startups and new business units within existing companies to speed up solar technology development and deployment in the United States. Since 2007, the program has helped launch more than 50 American small businesses, which have since attracted more than $1.7 billion in follow-on private sector investments. These growing companies have created more than 750 jobs across the U.S. solar energy industry.
Since its inception, the SunShot Incubator program has invested in technological innovation for solar hardware. In 2011, the Department broadened the scope of the program to include projects that address soft or non-hardware costs such as installation, permitting, interconnection, and inspection, which can amount to up to 40% of the total cost of solar installation. (For a breakdown of the soft costs of solar—compared to hardware and module costs—take a look at this interactive graph.) The current round of soft cost projects are developing creative business models, financing options, system designs, and software which are applicable to the entire solar industry. Building off these efforts, the new Incubator round announced today provides additional opportunities for small businesses and entrepreneurs in the U.S. solar field.
Divided into two areas—solar hardware and soft costs—this round of Incubator funding will help accelerate technology innovation and commercialization at different maturity stages.
Projects that are focused on solar hardware development and deployment are eligible under the following categories:
Up to $500,000 to help speed the transition of a proof-of-concept technology to the early-stage functional prototype stage
Up to $1 million to accelerate the transition of an early-stage functional prototype to a full-size prototype that could later be manufactured
Up to $4 million to develop efficient manufacturing processes and equipment to move technology from a full-size prototype to pilot-scale production.
This new Incubator round will also support projects that are addressing soft cost reduction goals:
Up to $500,000 to accelerate the transition of a proof-of-concept business plan or early stage solutions to early customer trials
Up to $2 million to drive full commercialization of innovative technologies that reduce solar deployment soft costs.
Read more information and application requirements for this Funding Opportunity Announcement (DE-FOA-0000838).
The Energy Department’s SunShot Initiative is a collaborative national effort to reduce the cost of solar energy by about 75% by the end of the decade, making subsidy-free solar energy cost-competitive with other forms of energy. Achieving this goal will drive widespread adoption of solar energy technologies, fortify the U.S. leadership in the global clean energy race, spur new industries, and create jobs across the nation.
The Energy Department’s Office of Energy Efficiency and Renewable Energy facilitates deployment of energy efficiency and renewable technologies and market-based solutions that strengthen U.S. energy security, environmental quality, and economic vitality.
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The wind industry says the incentive is vital to funding for new projects, and is pushing hard for renewal before it expires on Dec. 31.
Advocates are working to ensure the credit is part of any year-end tax “extenders” package that passes Congress, but face opposition from conservative groups that say it’s time for the credit to die.
Critics see the credit as federal meddling in energy markets and say the industry should be allowed to sink or swim.
While much of that action is behind the scenes, energy will also be the subject of a Senate Finance Committee hearing Wednesday on energy efficiency tax policy.
A number of energy efficiency-related tax incentives for buildings, homes and equipment have expired or will soon lapse.
Witnesses at the hearing include Dan Arvizu, the director of the Energy Department’s National Renewable Energy Laboratory.
Outside of Congress, the Environmental Protection Agency faces a court-ordered Dec. 14 deadline to finalize tougher air quality standards for fine particulate matter, also known as soot.
The agency sent the rules to the White House Office of Management and Budget for review last Tuesday.
On the symposium/speech circuit this week, experts will break out their crystal balls to look at the future of energy.
On Tuesday, Exxon Mobil will unveil its 2013 Outlook for Energy, a “comprehensive look at long-term trends in energy demand, supply, emissions and technology.”
William Colton, Exxon’s vice president for corporate strategic planning, and Kenneth Cohen, the company’s vice president for public and government affairs, will present the outlook at the Center for Strategic and International Studies.
On Friday, a number of experts will gather at the National Press Club for an event titled: “Our National Energy Policy: Post-Election Prospects and Challenges.”
Speakers will include James Connaughton, who headed the White House Council on Environmental Quality under former President George W. Bush and is now with the power company Exelon; retired Gen. James Jones, who is President Obama’s former National Security Adviser and a former Supreme Allied Commander of NATO, and United Nations Foundation President and former Colorado Sen. Tim Wirth.
OurEnergyPolicy.org hosts the event.
Finally, two other events to watch:
On Wednesday morning the Washington International Trade Association will hold an event titled: “U.S. Trade and Energy Policy: Coherence or Conflict?”
A range of experts will tackle two hot-button topics: Whether the U.S. should expand exports of natural gas, which is growing in abundance, and trade in renewable energy-related goods, the subject of trade battles between the U.S. and China.
Also on Wednesday, former Rep. Bob Inglis (R-S.C.) will bring his campaign for a carbon tax (offset by reductions in income taxes) to Johns Hopkins University for a mid-day event.
Inglis heads the recently created Energy and Enterprise Initiative at George Mason University.
Written by Ben Geman in The Hill. View original article here