How a mock R&D tax audit works

The ten steps

1. 1Select the stateChoose where the research was performed. creditARMOR checks whether that state runs its own research credit.
2. 2Credit checkYou see which tracks apply: the federal credit (IRC section 41) and, where the state has a program, the state credit.
3. 3Upload your claim formsForm 6765, the state claim form where there is one, and the prior-year Forms 6765 that support the base amount.
4. 4Confirm your QRAsThe business components listed in Section G of Form 6765 are read out and filled in for you. Check each one, edit it if needed, and approve it.
5. 5Documents for each projectUpload the records behind each project in turn: payroll and time, tickets and commits, specifications, test results, contracts and the rest, across eleven evidence categories. TaxTrex subscribers can add the project's position paper here.
6. 6AnalysisThe claim forms are read first, then each project's documents are classified, matched to the examiner questions, cross-checked and scored.
7. 7Draft IDR per projectEach project gets its own draft Information Document Request response: the questions, a Strong / Weak / Missing rating against its own documents, and an editable draft answer of a page or two per question.
8. 8Hallucination controlThree independent AI models check every answer against the source documents. Any disagreement is flagged for human review with the passage shown.
9. 9Risk reportFederal, state and combined scores for each project and for the company-wide items, red flags, risk by area, a prioritized fix plan and a projected score.
10. 10ExportDownload each project's IDR response as Word, PDF or Google Docs, and the risk report as PDF.

What you need before you start

The Before you start checklist walks through this in more detail.

• The tax year and the state where the research was performed.
• Form 6765 as filed or planned, and the state credit form where one exists.
• The records behind each project: payroll, time, technical documents, tests, contracts and invoices.
• Optionally, a TaxTrex position paper for each project.

What the result means

A score measures evidence gaps on a 0 to 100 scale; lower means fewer gaps. It is a product methodology, not an audit probability and not an IRS or state determination. The assessment scope page explains what the mock audit does and does not do.