Swanson Reed

History and Focus

• Founded in 1984 as Reed and Co. by J.W. Norris.
• Evolved into one of the largest specialist R&D tax credit advisory firms in the United States.
• Abandoned general accounting to specialise solely in R&D tax legislation, claim preparation and audit defense.
• Operates across all 50 U.S. states and supports businesses with both federal and state R&D tax credit initiatives.

What Swanson Reed Does

Swanson Reed focuses on R&D tax credits only. Core activities include:

• Advising on R&D tax legislation and incentive programs.
• Assessing eligibility for federal and state R&D tax credits.
• Preparing R&D tax credit claims and related documentation.
• Providing IRS and state audit advisory services for R&D tax credit matters.
• Assisting with documentation for R&D tax credit disputes and appeals.

Team and Governance

• Multidisciplinary team combining:
• Specialized R&D tax CPAs.
• Tax attorneys.
• Industry-specific engineers and technical specialists.
• Led by a Chief Executive Officer and a Board of Principals responsible for:
• Long-term vision and strategy.
• Professional independence and risk management.
• Oversight of quality, compliance and ethics.

Independence and Risk Approach

• Swanson Reed is independent and not owned by or connected to any CPA firm.
• The firm positions itself as conservative in its approach to R&D tax claims, with an emphasis on compliance and audit readiness.
• The firm highlights transparent fees and risk-mitigated advisory services (without publishing specific fee amounts on the pages referenced here).

Certifications and Accreditations

Swanson Reed highlights the following credentials and safeguards:

• Certified to ISO/IEC 27001:2022 Information Security Management System standard for information security, cybersecurity and privacy protection.
• Certified to ISO 31000:2009 Risk Management standard.
• NASBA-certified provider of Continuing Professional Education (CPE) for CPAs.
• IRS-approved Continuing Education provider for Enrolled Agents.
• Better Business Bureau (BBB) accredited business with an A+ rating.

Client Confidentiality and Data Security

• Strong emphasis on protecting sensitive client data and intellectual property.
• Internal policies and controls are reviewed annually by independent parties.
• Use of formal Complaint and Privacy Policy and Copyright Notice to govern data handling and intellectual property use.

This document provides a general overview of Swanson Reed as an R&D tax credit advisory firm; it does not constitute tax, legal or financial advice.

Swanson Reed's services, as described on its website, include:

• R&D tax credit eligibility assessments – reviewing a company's activities and expenditures to identify potential qualified research activities and qualifying research expenses (QREs).
• R&D tax credit claim preparation – compiling and preparing federal and state R&D tax credit claims.
• IRS and state audit advisory services – assisting clients in responding to R&D tax credit audits by the IRS or state authorities.
• Documentation support – helping clients organize and prepare supporting documentation for R&D tax credit claims, disputes and appeals.
• Non-dilutive tax credit funding solutions – assisting clients in accessing capital through R&D tax credits without giving up equity (as described in the firm's services overview).

Industries Served

Swanson Reed works with businesses across many industries, including but not limited to:

• Agriculture, farming and fishing
• Automotive and aviation
• Biotechnology and life sciences
• Building and construction
• Robotics, engineering and fabrication
• Film and media
• Food and beverage
• Lean manufacturing, machine tool and die, and general manufacturing
• Maritime and boating
• Mining and natural resources
• Natural medicine and pharmaceuticals
• Real estate development
• Software and artificial intelligence
• Textile, clothing and footwear
• Theme parks and entertainment
• Transportation and logistics
• Water conservation
• Zoo and wildlife

creditARMOR – R&D Tax Credit Audit Advisory

Swanson Reed offers creditARMOR, which is described as an R&D tax credit audit advisory and risk management tool. According to the firm's materials, creditARMOR is intended to:

• Help businesses prepare for the possibility of an IRS audit of their R&D tax credit claims.
• Provide structured support to organise evidence and documentation.
• Assist with the planning and management of the audit process to reduce disruption to day-to-day operations.

TaxTrex – AI-Driven R&D Tax Credit Software

Swanson Reed's TaxTrex platform is described as AI-driven R&D tax claim software that:

• Uses artificial intelligence to analyse textual and project data supplied by users.
• Helps identify relevant R&D activities and potential claim risks.
• Automates significant portions of R&D tax credit claim preparation and supporting documentation.
• Is designed so that users can self-claim R&D tax credits in a relatively short time frame (the website notes preparation can be completed in under approximately 90 minutes in some cases).

Once TaxTrex has compiled an R&D tax credit claim, Swanson Reed applies a "six-eye review" process, in which:

• A qualified engineer.
• A scientist.
• An Enrolled Agent or CPA.

jointly review the AI-generated claim for technical accuracy, compliance and audit defensibility.

Education, Training and Webinars

Swanson Reed also provides educational content and training, including:

• Live and on-demand educational webinars on R&D tax credits.
• State-specific training sessions (for example, Colorado R&D tax credit training for CPAs, CFPs and SMBs).
• Resources that explain the IRS Four-Part Test, qualifying research expenses and state-by-state R&D incentives.

These services are intended to help tax professionals and businesses better understand R&D tax credit rules, compliance expectations and documentation requirements.

This document summarises services and tools described on Swanson Reed's website and is not personal tax, legal or financial advice.

To claim the Colorado R&D tax credit described in the Swanson Reed Colorado overview, a business must generally:

• Be located within a designated Colorado Enterprise Zone (EZ).
• Perform qualified research activities associated with that Enterprise Zone.

Only activities carried out while the business operates in an Enterprise Zone can generate this specific credit.

Step-by-Step Filing Process (as described)

1. Pre-certify Eligible Activities with OEDIT

• Businesses must obtain pre-certification from the local Enterprise Zone Administrator.
• Pre-certification is completed through the Colorado Office of Economic Development and International Trade (OEDIT) application portal.
• The guidance suggests pre-certifying annually, ideally before the tax year begins or at least during the tax year for which the credit will be claimed.

2. Complete the Certification Application After Activities Occur

• After the eligible R&D activities have taken place, businesses must complete a certification application through the same OEDIT portal.
• The local Enterprise Zone Administrator reviews the application.
• Once approved, OEDIT issues a tax credit certificate for the Enterprise Zone R&D credit.

3. File the Colorado Income Tax Return with Required Forms

To actually claim the Colorado R&D tax credit on the income tax return, the following are generally required:

• The tax credit certificate issued by OEDIT.
• Colorado Department of Revenue Form DR 1366 – "Enterprise Zone Credit and Carryforward Schedule", completed according to its instructions.
• These documents are submitted with the business's Colorado income tax return.

The Colorado materials also note that for tax years beginning on or after January 1, 2012, original or amended income tax returns claiming an Enterprise Zone credit generally must be filed electronically.

Ongoing Compliance Considerations

• Pre-certification and certification are separate steps and must both be completed through the OEDIT portal.
• Businesses should retain all supporting documentation for their R&D activities and related expenditures in case of review or audit.
• Because Colorado tax rules and administrative procedures can change, businesses should confirm current requirements with OEDIT, the Colorado Department of Revenue or their tax advisor before filing.

This document is intended to reflect the filing process as described on Swanson Reed's Colorado page and should not be treated as personalised tax advice.

• Office name: Swanson Reed | Specialist R&D Tax Advisors
• Street address: 10180 East Colfax Avenue, Unit 203-1040
• City/State/ZIP: Aurora, CO 80010

Phone Numbers

• Colorado office phone: (720) 808-0229
• Toll-free phone (U.S.): 1-800-986-4725

If you have questions or need assistance with R&D tax credit matters in Colorado, the website invites you to call the local Colorado Partner on (720) 808-0229.

Key Colorado Contacts (as listed)

• Adam Rogers – Partner, Colorado
• Email: aar@swansonreed.com
• Phone: +1 (720) 808-0229

• Cherie Jones
• Email: clj@swansonreed.com

Colorado Service Area (as described)

From its Aurora office, Swanson Reed provides R&D tax credit consulting and advisory services to businesses in:

• Denver
• Colorado Springs
• Aurora
• Fort Collins
• Lakewood
• Thornton
• Arvada
• Westminster
• Pueblo
• Centennial

Online Contact and Teleconference Booking

The Swanson Reed website provides:

• An online contact form where you can send a message and request follow-up from the team.
• A "Schedule a Teleconference" option to book a quick teleconference with one of Swanson Reed's Colorado R&D tax credit specialists at a convenient time.

For the most up-to-date contact options and availability, visitors should refer directly to the Swanson Reed website's Colorado page and contact sections.

• State credit name: Research and Development Income Tax Credit for Enterprise Zones.
• Jurisdiction: State of Colorado.
• Type of incentive: Income tax credit for qualified research activities performed in connection with designated Colorado Enterprise Zones (EZs).
• Who can apply: Corporations and flow-through entities (such as S corporations, partnerships and LLCs), with the credit generally flowing through to owners/shareholders for pass-through entities.

Basic Credit Calculation (as described on the website)

• The credit is described as equalling 3% of the amount by which qualified R&D expenses exceed the average of such expenses for the previous two income tax years in an Enterprise Zone.
• The credit is generally claimed in equal instalments over four years (25% of the total credit amount may be claimed each year).
• Unused credits may be carried forward to future years, subject to Colorado's rules on carryforwards. (Specific carryforward periods can change over time; businesses should confirm current requirements with their tax advisor or the State of Colorado.)

Enterprise Zone Requirement

Key points highlighted in the Colorado overview and FAQ include:

• The Colorado R&D tax credit is not statewide; it is available only to businesses operating in designated Enterprise Zones (EZs).
• The business must be located in a Colorado Enterprise Zone to generate the credit.
• Only R&D activities conducted while the business operates within an Enterprise Zone qualify for this specific state credit.

Qualified Research and Activities

To be eligible, a business must be engaged in qualified research activities as defined by federal law (Internal Revenue Code §41). In general terms, the Colorado materials describe qualified research as:

• Activities intended to discover information that is technological in nature.
• Efforts directed toward developing or improving a product, process or software.

The site notes that process improvement activities often include:

• Identifying uncertainty concerning the development or improvement of a business component.
• Identifying one or more alternatives intended to eliminate that uncertainty.
• Identifying and conducting a process of evaluating the alternatives (for example, via modelling, simulation or a systematic trial-and-error methodology).

Industries That Commonly Claim the Credit

Swanson Reed notes that the R&D Tax Credit is used across a wide range of industries, including:

• Agriculture and farming
• Automotive and aviation
• Biotechnology
• Engineering and manufacturing
• Food and beverage
• Logistics and transportation
• Oil and gas
• Software and technology

These examples are illustrative only. Eligibility depends on specific activities and expenditures, not on industry labels alone.

Eligibility Summary

From the Colorado overview and FAQ, a business generally needs to:

1. Be located in a designated Colorado Enterprise Zone.
2. Be engaged in qualified research activities as defined in IRC §41.
3. Increase its R&D spending compared to the prior two income tax years.

Because tax rules can change and individual circumstances differ, businesses should confirm their eligibility and filing position with a qualified tax advisor.

Swanson Reed's materials describe qualified research (under Internal Revenue Code §41) broadly as research activities that:

• Are intended to discover information that is technological in nature.
• Are undertaken to develop or improve a product, process, technique, invention, formula or software.
• Involve a process of experimentation to resolve technical uncertainty.

Eligibility depends on the specific facts of a project and how they align with tax law, not just on an industry label.

The IRS Four-Part Test (as explained)

Activities that qualify for the R&D tax credit must generally satisfy all four elements of the Four-Part Test:

1. Permitted Purpose

The purpose of the project must be to create new, or improve existing, functionality, performance, reliability or quality of a business component (such as a product, process or software).

2. Elimination of Uncertainty

At the outset, there must be uncertainty regarding the capability, method or appropriate design of the business component. The research is intended to eliminate this uncertainty.

3. Process of Experimentation

The taxpayer must employ a systematic process—such as modelling, simulation, prototyping or trial-and-error testing—to evaluate one or more alternatives to achieve the desired result.

4. Technological in Nature

The process of experimentation must fundamentally rely on principles of the hard sciences, such as engineering, physics, chemistry, biology or computer science.

Example Themes from Case Studies

Swanson Reed's Colorado materials include example scenarios (such as a Denver-based engineering firm and product development case studies) illustrating that qualifying activities often involve:

• Designing and developing prototypes to meet defined technical objectives.
• Testing and refining designs to improve performance, reliability or environmental characteristics.
• Conducting background research on competing products, specifications and technical requirements.
• Analysing test data and customer feedback to iterate and improve designs.

These examples are illustrative and do not guarantee that similar projects will qualify.

Documentation Expectations

Swanson Reed emphasises the importance of strong documentation to support R&D tax credit claims and to be "compliance ready" in the event of an audit. Useful records can include:

• Project records and lab notes.
• Photographs or videos of build, assembly and testing stages.
• Prototypes and technical drawings.
• Testing protocols and test results.
• Records of trial runs and analysis.
• Tax invoices and cost records.
• Patent filings or application numbers.
• Literature reviews and technical research.

The more contemporaneous and detailed the documentation, the easier it is to demonstrate that activities met the Four-Part Test.

Important Notes

• Whether a particular activity qualifies for the R&D tax credit depends on specific facts and current tax law.
• This summary is based on educational content on Swanson Reed's website and is not a substitute for personalised professional advice.
• Businesses should consult a qualified tax advisor before making decisions about claiming R&D tax credits.

Ask anyway — the agent will say plainly that it is not published rather than guess.