Since 1961, Mallard Manufacturing Company has been a leading producer of high-density, live-storage handling systems. The Illinois-based company offers one of the broadest product lines in the industry with solutions that save energy, space and labor. Solutions are designed for pallet flow, carton flow and gravity flow requirements, and can be engineered to meet customers’ specific material handling requirements.
Situation
When the firm Lindgren Callihan Van Osdol & Co., Ltd joined Wipfli, its Illinois client Mallard Manufacturing was introduced to additional business resources including Wipfli’s R&D tax credit expertise. Wipfli helped Mallard understand that although tax credits have been around for more than 25 years, the definitions of R&D activities have broadened in recent years. Mallard relied on outdated, narrow definitions of what qualifies for the credit and the company quickly recognized it might be missing valuable opportunities.
Strategy
Wipfli brought up-to-date tax credit knowledge as well as experience working closely with the manufacturing industry to aid Mallard in identifying meaningful tax credits. Among Wipfli’s efforts the team:
- Met initially with key Mallard individuals to identify activities that qualify as research and development. Mallard had several day-to-day activities that the company wasn’t aware could qualify for the research credit. Chief among them was its development of unique custom solutions.
- Performed a full study which included meeting with Mallard’s key technical group to evaluate which projects would qualify for the credit, the expenses associated with those projects and assisted in gathering the documentation needed to substantiate the credit.
Benefits
Mallard Manufacturing was pleased with the minimally intrusive process, which only required 10-15 hours of the company’s time, and pleasantly surprised by the results. Following Wipfli’s efforts, Mallard was eligible for 14 times the annual R&D tax credits over the previous years.
Additionally, Mallard is better prepared to make sure new opportunities aren’t missed down the road. The company obtained recommendations from Wipfli for finding and taking the tax credit in future years, as well as guidance for ensuring proper documentation of activities. Wipfli’s understanding of IRS audits helped Mallard identify what records to maintain in the event of an audit.
