Corporate Tax Services

Today’s tax compliance is facing complex tax laws and tax reformation, and tax return forms are becoming more complicated. Also, the tax system is expected to become even more sophisticated to respond to the continued globalization and evolvement of the business environment.

KLiCHS tax professionals can help you address complicated tax issues and assist you in preparing tax returns, making an election, claiming the benefit of a tax credit, correcting mistakes in the previously filed return, or providing tax information to the Internal Revenue Service or state and local taxing authorities.

Our services include:

• – Federal, state & local income tax
• – Withholding tax
• – Payroll tax
• – Sales and use tax

International Tax Services

The world is getting smaller than ever before as technology improvement continues. Many U.S. companies attract to foreign markets because at a certain point the companies may need to expand their production capabilities to foreign countries or attract more foreign consumers. Similarly, foreign businesses may elect to enter the U.S. markets.

When the companies evolve and face such cross-board transactions, the companies will confront various tax challenges from the expanded international activities. Whether the growth of international transactions is involved with the initiation of export or import, using foreign agencies, establishing foreign facilities, or acquiring existing foreign businesses, international taxation is not always obvious, therefore, requires careful planning.

International taxation is complicated because, when an international transaction occurs, the governments of both trading parties may want to collect taxes from the same transaction. Each country has tax laws that govern the tax treatment for its residents doing business aboard and foreign aliens doing business in that country. Although international taxation is not same from country to country, bilateral income tax treaties between both countries can offer a method for mitigating a potential double taxation of their residents.

We can help you address the key international tax issues and implement strategic transactions to optimize tax savings in the U.S. We can provide you with seamless access to international taxation contexts and regional tax experts in global business markets.

Our services include:

• – Global tax strategies
• – Withholding tax of foreign taxpayer
• – Foreign tax credits
• – FATCA (Form 8938) compliance
• – Foreign bank account reporting (FBAR) compliance
• – Nonresident federal income tax

Tax Planning and Specialty Tax Services

Taxes are a critical part of the cash flow management, and a strategic tax plan should not be ignored to meet your financial goals. The careful planning on the timing of income recognition, deductibility of expenditures, selection of investments, entity types, type of retirement plans and related tax considerations may assist you, and your company in reducing the current taxes and will increase your ability to focus more on strategic aspect of your business. Our tax experts can provide tax strategies for individual, corporate, estate and trusts. Also, our Nexus reviews on your company and tax incentive analysis can help you tackle a wide range of tax issues.

Our services include:

• – Corporate, individual, estate, trust & gift tax strategic planning
• – Corporate state Nexus review & Various tax incentives

Tax Accounting Services (ASC 740)

It is important for management to understand accounting for income taxes particularly as it relates to ASC 740, “Accounting for Income Taxes.” The objectives of accounting for income taxes are to recognize tax payables or receivables for the current year and deferred tax assets and liabilities for the future tax consequences of events recognized in a company’s financial statements or tax returns. Understanding basic principles and challenges to the complexities of income tax accounting become critical elements to the company’s successful financial reporting. The income tax accounting requires management’s judgment especially on valuation allowance assessments and often requires the use of estimates and assumptions, which can be challenging to determine.

For the successful income tax accounting, a company must have the appropriate understanding the financial tax accounting rules and technical tax rules. We can help you address the measurement and recognition of deferred tax assets and liabilities, analyze how to present temporary differences in financial statements and identify disclosures required under ASC 740 and FIN 48. Further, we can help establish an integrated plan for both financial accounting and income tax needs.

Transfer Pricing

Transfer pricing issues have long been a source of concern to tax officers. Globalization has fueled the growth of international corporations and the multiplying of various inter-company cross-board transactions.

The transfer pricing enforcement under the Internal Revenue Code Section 482 can apply in any situation where two taxpayers are owned or controlled directly or indirectly by the same interest. The intercompany cross-board transactions related to the settings of prices, for instance, a sale of goods from one member of a corporate family to another, the fees under the service agreement, the royalty rate under a patent license, the interest rate on a loan, the amount of payable or receivable on any other intercompany transactions, would be facing the transfer pricing issues and governed by the U.S. transfer pricing regulations.

The current U.S. regulations require that all companies with related-party transactions are required to compile “reasonable and full” documentation of arm’s-length pricing prior to filing annual income tax returns.

Our transfer pricing study contains the description of the taxpayer and covered transactions, functional and risk analysis, identification of comparable transactions and comparable unrelated entities, analysis of comparable, and applying the transfer pricing method to the facts.

Our services include:

• – Transfer pricing documentation
• – Functional and risk analysis
• – Determination of arm’s length interest rate and guarantee fees
• – Valuation of intangible assets (Cross-border sales and transfers)
• – Tax authority dispute resolution

In addition, for clients looking for a confidence in the future on transfer prices and related taxable income, we strongly recommend clients to secure the Advance Pricing Agreement (“APA”) between IRS and the taxpayers or among multiple other taxing authorities and the taxpayers. An APA offers a company several other benefits. It provides greater certainty on the transfer pricing method adopted, mitigating the possibility of disputes and facilitating the financial reporting of potential tax liabilities. Importantly, an APA also reduces the incidence of double taxation, and the costs associated with both audit defense and documentation preparation.

Research & Development Tax Credits

The Research and Development Tax Credit is designed to stimulate increased company spending on Research and Development activities over time by reducing after-tax costs. In general, a qualifying company is eligible to deduct from corporate income taxes an amount equal to 20 percent of qualified research expenses above a base amount. Qualified research expenses include wages, supplies, and contract research expenditures.

KLiCHS assists taxpayers in the recovery of cash refunds, and the reduction of future tax liabilities through the Research and Development Tax Credit, as defined in Section 41 of the Internal Revenue Code of 1986, as amended, and various state tax codes.

Typically, proprietary methodologies for evaluating Research and Development Tax Credit opportunities has been developed, and the methodology for the Initial Assessment is composed of the following phases as described below: (Note: We offer the Initial Assessment with no cost: no-obligation study arrangement)

• – Phase 1:
•    The Preliminary Evaluation involves the evaluation of publicly available company information such as company websites or
•    news articles, and selected confidential information such as tax returns or financial statements.
• – Phase 2:
•    This includes evaluating the supplied data, developing initial analytical models, and performing a review of the relevant
•    regulations and applicable case law.
• – Phase 3:
•    During Phase 3 of the Initial Assessment, we will come on-site to your company’s facilities to interview key personnel and
•    gather information in support of the company’s qualified activities.
• – Phase 4:
•    Immediately following Phase 3, we analyze and distill all the data and information collected prior to and during the Field
•    Investigation with our proprietary analytical models. Following the Mid-Point Review, the value of the Research and
•    Development Tax Credit is known and any potential issues are identified.