Methodology & Standards

How we conduct R&D credit studies.

Every Alexander & Blake engagement follows a structured methodology designed for thoroughness, defensibility, and CPA coordination. This page documents the process, standards, and deliverables that define our work.

Qualification

How qualification is assessed.

Qualification is evaluated against the IRS four-part test. Each business activity must satisfy all four requirements to be included in the credit study.

Permitted Purpose

The activity must relate to developing or improving a product, process, software, technique, formula, or invention that is intended for sale, lease, license, or internal use.

Technological in Nature

The activity must fundamentally rely on principles of engineering, computer science, biological science, or physical science.

Elimination of Uncertainty

The taxpayer must face uncertainty regarding capability, method, or design at the outset of the activity.

Process of Experimentation

The taxpayer must engage in a systematic process to evaluate alternatives and resolve the uncertainty — through modeling, simulation, testing, or iterative design.

Technical Interviews

How interviews are conducted.

Technical interviews are the foundation of every credit study. They document the qualifying activities, technical uncertainties, and experimentation processes that support each credit position.

Interviews are conducted with technical leads, project managers, and engineering staff who can speak to the nature of the work
Each interview follows a structured format aligned with the four-part test requirements
We document the specific uncertainties encountered, alternatives evaluated, and outcomes achieved
Interview notes are reviewed by the technical review team before inclusion in the final study
Sessions are designed to take 30–60 minutes per project area, with minimal disruption to operations
Financial Analysis

How QRE support is built.

Qualified research expenses (QREs) are the financial foundation of the credit computation. We build supporting schedules at the project level with clear documentation for each expense category.

Wages

Employee wages allocated to qualifying activities based on time spent on R&D, supported by payroll records and activity allocation analysis.

Contract Research

Payments to contractors for qualifying work, calculated at 65% per IRC Section 41 requirements, with supporting invoices and scope documentation.

Supplies

Materials consumed in the R&D process, documented with purchase records and allocation to qualifying projects.

Documentation

How methodology is documented.

Every completed study includes a methodology memo that documents the approach, assumptions, and basis for each position. This memo serves as the primary reference for CPAs, management, and any future review.

Credit computation method selection and rationale (ASC or Regular Credit)
QRE allocation approach and basis for activity-level estimates
Base amount calculation methodology and assumptions
State credit coordination approach (for SC engagements)
Documentation of positions taken and their factual support
Summary of qualifying activities and business component mapping
CPA Coordination

How CPA coordination works.

We work directly with the client's CPA or qualified tax professional throughout the engagement. This coordination ensures clean integration of the credit study with the overall tax return filing.

Filing Posture Review

We coordinate with the CPA to confirm filing approach, prior-year credit history, and any relevant return details before finalizing the study.

Study Package Delivery

The CPA receives a complete study package including executive summary, QRE schedules, project narratives, methodology memo, and Form 6765 support.

Form 6765 Integration

We provide filing-ready schedules and computation detail that map directly to Form 6765 line items for efficient return integration.

Ongoing Support

If questions arise during or after filing, we coordinate directly with the CPA on resolution, documentation, and correspondence.

Our Standard

What “prepared for review” means.

We prepare every engagement with the expectation that the work may be examined. This standard shapes how we conduct interviews, organize documentation, and present the final deliverable.

Every credit position is grounded in documented facts, not assumptions
Project narratives are written to withstand detailed technical questioning
QRE schedules include supporting detail sufficient for line-item verification
The methodology memo documents the analytical basis for each position taken
Work product is organized for efficient navigation by examiners and advisors
All supporting work papers are retained for the statutory retention period
Audit Support

What audit support includes.

Every engagement includes ongoing audit support at no additional cost. If the credit claim is reviewed, we provide documentation, correspondence support, and resolution assistance.

Documentation Support

We provide all original work papers, narratives, schedules, and methodology documentation to support the credit position.

Examiner Correspondence

We draft responses to IRS or state inquiries, including information document requests and technical position papers.

Technical Representation

We participate in examiner meetings and technical discussions as needed to defend the credit position.

Resolution Support

If adjustments are proposed, we work with the CPA to evaluate options and support an informed resolution.

Questions About Our Process?

Schedule a complimentary consultation to discuss how our methodology applies to your business activities. No obligation, no records required.

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