Sect. 199 Domestic Production Activities Deduction

Managing Ongoing Compliance Challenges With the Key Federal Tax Incentive

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, September 17, 2009

Program Materials

This seminar will identify a discrete list of widespread, ongoing challenges involving claims for the federal Sect. 199 domestic production activities deduction. The panel of federal tax advisors will outline alternative approaches on more efficient compliance in those areas.

Description

Despite several years of experience with the federal Sect. 199 domestic production activities deduction, both U.S. manufacturing companies and many services businesses continue to wrestle with problematic decisions and data-gathering and data-segregation every year they claim the deduction.

Confidently determining whether a company's business activities, products sold, employee wages, etc. qualify for the Sect. 199 deduction calculation is a demanding goal for a company tax staff, as is deciding whether the company's systems and methods for segregating costs and wages are adequate.

Guidance from experienced advisors who work routinely with Sect. 199 can make a big difference in preparing a corporate tax staff to plan for the most nettlesome compliance challenges and to refine ongoing systems and processes to make the task easier in future years.

Listen as our panel of Sect. 199 deduction experts offers you practical alternatives for surmounting the most frequent compliance issues with the deduction that confront companies in a broad array of industries.

READ MORE

Outline

  1. Background on Sect. 199 deduction
    1. Created under American Jobs Creation Act of 2004
    2. Help for manufacturers, after Congress pressured to eliminate extraterritorial income exclusion
    3. Taxpayers in “qualified production activities” can deduct 6% of qualifying income (9% in 2010)
    4. Finalized IRS regs adopted in May 2006
  2. Examples of key ongoing compliance challenges with deduction, and best practices for meeting them
    1. Reviewing MPGE business activities for those qualifying for deduction
    2. Reviewing W-2 wages for highest amount allocable to domestic production gross receipts
    3. Identifying and validating property items that qualify
    4. Setting method to allocate gross receipts between DPGR and other activities
    5. Reviewing structure of manufacturing contracts
    6. Modifying cost accounting systems so that U.S. MPGE activities meet “substantial in nature” test
    7. Statistical sampling methods
    8. Partnership and S corporation issues in claiming deduction

Benefits

The panel will address these and other compliance challenges:

  • Reviewing what qualifies for the deduction: Business activities, products sold, wages.
  • Evaluating internal systems and processes: Cost, gross receipts and wage segregation and allocation systems plus statistical sampling methods.
  • Anticipating special issues for certain business entities and industries: Partnerships, S corporations, the software and construction industries.
  • Reviewing manufacturing contracts: Verifying they're written in a way to give your company benefits of the deduction.

Faculty

Brandy Arbuthnot
Brandy Arbuthnot
Tax Senior Manager
BDO USA

As a member of her firm's Sect. 199 and Corporate Tax Consulting Groups, she has extensive experience with federal and...  |  Read More

Chuck Marchand
Chuck Marchand
Associate, Tax Services Group
Plante Moran

His tax work emphasizes the Sect. 199 deduction and R&D tax credits, among other areas. He works with corporate,...  |  Read More

Tom Windram
Tom Windram
National Leader, R&D/Federal Credit and Incentives
RSM McGladrey

He is a managing director in the firm's National Tax Office. His responsibilities include client service, technical...  |  Read More

Other Formats
— Anytime, Anywhere

On-Demand Seminar Audio

$247