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Subject: Re: [dita] FYI - Research on Possible Corporate R&D Deductions for OASIS DITA Standards Development


Thanks, Stan -- That mirrors my understanding of US law.

Best,
Kris

Kristen James Eberlein
Chair, OASIS DITA Technical Committee
Principal consultant, Eberlein Consulting
www.eberleinconsulting.com
+1 919 682-2290; kriseberlein (skype)

On 1/3/2017 9:35 AM, Dr. Stanley Doherty wrote:
Hi --

I took an action item a few weeks back to look into US IRS policies regarding one tax-paying high-tech company claiming a deduction for volunteer work (OASIS DITA) performed by an employee.

I looked at the high-level IRS policy (
https://www.irs.gov/businesses/small-businesses-self-employed/current-year-deduction-of-research-development-expenditures) and ran the idea past two of my own company's Finance people.

CONCLUSION: No US-based tax-paying institution would consider claiming an annual US IRS tax deduction for our volunteer work with OASIS. They would open themselves up for an audit ... which is simply too risky given the negligible benefits.

ISSUES

1. We are not employees of OASIS. Now if OASIS were paying us to develop DITA, any salary paid out to us could be eligible for the R&D tax credit.

2. IP -- If I do R&D work that is NOT considered the intellectual property of a tax-paying institution (day job), that tax-paying institution cannot claim the result of my R&D activity as its "product" (IP).

3. It takes two years to collect data on R&D expenditures before a tax-paying institution can claim a deduction. My tax-paying institution would need to set up a time tracking system that differentiated between my use of a third-party standard to do my company R&D and my R&D contributions toward the development of that third-party standard.

4. "Volunteer" activities of an individual fall under the category of individual professional development, not corporate R&D.

Basically the US IRS uses R&D tax credits to encourage top-down investment, not bottom-up volunteer work.

Stan



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