Audit Readiness
In our experience, many claims are not lost on the law. They are lost because the taxpayer cannot connect a dollar of expense to a documented process of experimentation years after the fact.
What's included
- Evidence map linking every expense category to supporting records
- Graded risk register across projects, entities and tax years
- Remediation plan with owners and deadlines
- Pre-assembled response pack for common information document requests
Who this service is for
Companies with material claims, prior-year exposure, or an upcoming transaction.
Discuss this service (opens in a new tab)How it works
Step 1: Test from the examiner's side
Audit readiness work reverse-engineers your claim from the examiner's side of the table. We test whether each project narrative is supported by contemporaneous records, whether wage allocations trace to identifiable individuals and activities, and whether contract research agreements actually place economic risk and substantial rights where the claim assumes they sit.
Step 2: Grade the file
The output is a graded file. Strong positions are documented so they can be supported quickly in an examination. Weak positions are either supported with additional existing records or removed (for a claim already filed, by an amended return, ideally a qualified amended return filed before IRS contact), which is often the more valuable outcome. Records are never created or backdated to appear contemporaneous.
Step 3: Ready for the IDR
Running this exercise before filing means the answers to likely information document requests already exist in an organised form, which can shorten response times. Actual timelines depend on the examiner, the scope of the requests and the facts of each claim.
Where creditARMOR helps
The parts of the platform this service draws on.
- Draft federal & state IDR-style questionsThe questions an examiner is likely to put in an Information Document Request, drafted per project: eight project-level federal questions and two state questions for each business component, plus the company-wide federal and state questions answered once from your forms. See the feature
- Evidence scoringEvery IDR question is rated Strong, Weak or Missing against the files you uploaded. See the feature
- Risk assessment engineFederal, state and combined audit-readiness scores from 0 to 100 (a higher score is better), each with a Low, Medium or High risk band. See the feature
- Fix libraryEach gap comes with a specific fix, prioritised by impact and the effort it takes. See the feature
Related services
- AI-Powered R&D Tax Credit ReviewMachine-assisted analysis of your projects, payroll and ledgers to estimate your credit and identify documentation gaps before you file.
- Compliance ReviewAn independent second opinion on methodology, base period calculations and multi-state apportionment.
- Documentation BuilderCapture engineering activity as it happens so project narratives are supported by contemporaneous records — continuously, not annually.
- Audit Defense SupportFacing an R&D tax credit examination? We help assess your claim, organize supporting evidence and prepare for the examiner's questions. If needed, Swanson Reed can assist you with representation before the IRS.
Common questions
What are the four parts of the qualification test?
The activity must have a permitted purpose: the costs must be eligible research or experimental expenditures (IRC sections 174 and 174A), and the research must relate to a new or improved business component (a product, process, computer software, technique, formula or invention) and aim to improve its function, performance, reliability or quality. It must be technological in nature, meaning the process of experimentation fundamentally relies on principles of the physical or biological sciences, engineering or computer science. It must be intended to discover information that would eliminate uncertainty about the capability or method for developing or improving the business component, or about its appropriate design. And substantially all (at least 80%) of the activities for the business component must be elements of a process of experimentation, such as modelling, simulation or systematic trial and error, used to evaluate one or more alternatives.
How far back can we claim?
Refund claims on amended returns must generally be filed within three years from the date the original return was filed (a return filed early is treated as filed on its due date) or two years from the date the tax was paid, whichever is later. A company that has never claimed can often claim credits for several open years, but the claim must identify each business component, the research activities for each and the total qualified wage, supply and contract research expenses, with a signed declaration. The payroll tax election and the 280C(c) reduced-credit election cannot be made on an amended return, and for a company without taxable income, prior-year claims generally create carryforwards rather than cash refunds. Time limits differ by state, and some state programs require registration, pre-approval or an application, often by a fixed deadline, before a credit can be claimed or used. Check each state's page in the credit database.
How is an engagement priced?
The creditARMOR mock audit is free. Scoping is also free, and for separate Swanson Reed services pricing is agreed before work begins, based on the size and complexity of the engagement. We do not price documentation or examination support work as a percentage of an unverified estimate.
Run a free R&D tax credit mock audit.
You can also book a free thirty-minute scoping call with a specialist. Upload your files and see how your evidence would hold up to the questions an IRS examiner is likely to ask. A higher score means a more audit-ready claim.
creditARMOR is a free service. Passing this mock audit does not guarantee that your claim will pass an IRS examination. Book a call or email hello@creditarmor.ai for a login.