Use Caution When Using AI to File for Tax Credits or Your Business Could Face Costly IRS Audits or Fines
SPRX CEO Dominic Vitucci consistently posts outright false or misleading claims about the capabilities of his firm’s artificial intelligence (AI) when filing for research and development (R&D) tax credits in his marketing-oriented LinkedIn posts.
Read more below for a breakdown of his latest false claims on LinkedIn:
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“The IRS does not want the Elle Woods version of your R&D tax credit. They want exactly the same thing as the last hundred they’ve seen.
And that’s easy because the same core report format has been circulating for something like 30 years.”
- Dominic Vitucci
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Here’s the reality…
The IRS isn’t looking for “the same thing as the last hundred they’ve seen.” His comment that you can use the same core report used for the last 30 years is simply not true.
In the last few years, the IRS has changed the documentation and reporting requirements for the R&D tax credit. Now, taxpayers and businesses must submit a detailed memorandum that outlines exactly how they qualify for the credit to support credits being claimed on amended tax returns. Among the required information for valid R&D credit claims, taxpayers are required to identify all comprehensive business components, research activities, information on the individuals who performed each research activity and the information each individual sought to discover. If the IRS determines the claim does not include the required pieces of information, it will reject the claim, which may lead to an IRS audit or fines.
SPRX claims that “the same core report has been circulating for 30 years,” which is not true. The IRS changed the operative form used to claim the credit for originally filed returns, which now requires much more detail at the time of filing. In doing so, SPRX is exposing its clients to the risk of audits and fines.
As one of the most significant tax credits, filing for R&D requires a deep understanding of recent changes. Clearly, SPRX misses the mark on a thorough understanding of the R&D tax credits, including IRS requirements and forms. Elle Woods was only one point away from a perfect LSAT. Obviously, SPRX couldn’t even get to perfect if they tried.
SPRX cuts CPAs out, automates the work and calls it innovation. But the IRS is already questioning AI tax tools, and SPRX is exactly the kind of shortcut they’re concerned about.
This isn’t smarter. It’s reckless.
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