Twenty-two year relationship with Braithwaite helps scientific instrument company defend industry leadership through research

Client Background

The Company, established in 1967, produces automated nondestructive residual stress analysis and applied stress analysis systems and equipment. It also provides field and lab services.

The company is a leading supplier and researcher in its field. One of its main accomplishments is the creation of the smallest portable x-ray diffraction measurement equipment in the world. Its customers include military, automotive firms, and bearing manufacturers.

Overview

Competition has pushed the Company towards the forefront of its industry. The company has six major competitors worldwide. It’s President says that for it to maintain the industry leadership “it is crucial to operate aggressively in terms of R&D.”

The R&D tax credit has enabled this success. Without it, he adds, the Company would have not been able to be so far ahead in its research and development.

Challenge

The Company was actively looking for a partner that would assist the firm in claiming the research and development tax credit. The company had had only limited success with a tax advisory services firm it had hired in the past. The hired firm had demonstrated little technical and financial expertise in claiming a tax credit for its investments in research.

“The work we do is really cutting edge,” says the Company President, “so we knew that what we were doing was (eligible) R&D.” He was looking for someone who could recognize the full value of the company’s R&D efforts, maximize the tax credit, and minimize audit exposure.

Solution

Through contacts at the National Research Council, the President heard about Bruce Braithwaite and his unmatched knowledge of the research tax credit program. Braithwaite had gained its first client.

To enable a more efficient claiming process, and based on Braithwaite’s recommendations, the Company developed internal reports and an information gathering system to collect technical and costing data.

Braithwaite was also able to identify a broader range of activities eligible for the R&D tax credit. Those were activities that the previous tax service firm had missed.

Non-expert accountants have limited knowledge of the program’s regulations due to its incredible complexity and frequently changing rules.

Since then, the Company and Braithwaite have enjoyed a 22-year successful relationship. “Braithwaite has always brought a good measure of counsel (to our firm). This is a unique attribute of Bruce and of how he structures his company,” says the Company President. This benefit is a neither easily qualified nor quantified. “It is value added when none is expected but it is definitely welcome.”