The federal case Intermountain Electronics, Inc. v. United States shows how even innovative companies can lose the R&D tax credit if their claims aren’t properly structured and documented.
Intermountain built custom electrical equipment for clients and claimed R&D tax credits on that work. The IRS challenged, and the court agreed: much of the activity was routine customer customization, not qualified research. Even where R&D may have been present, Intermountain lacked the project-level documentation the IRS requires.
The result? Their credits were denied.
TaxDrone.AI organizes every activity at the IRS-required business component level, preventing the overbroad claims that failed Intermountain.
Our AI tools separate true experimentation from routine customer-driven adaptations, ensuring only qualifying activities are included.
TaxDrone.AI builds project-level reports in real time, connecting wages and costs directly to eligible research.
If your work looks more like customization than qualified research, the system flags it before you file—protecting you from audit risk.
By filtering out non-qualifying activities and documenting the rest with precision, TaxDrone.AI maximizes your credits while keeping them fully defensible.
Intermountain lost because it blurred the line between custom projects and true R&D—and couldn’t prove its claims. TaxDrone.AI was built to make sure that never happens to you. With NTG’s decades of tax expertise plus AI-powered compliance, you get larger, audit-proof credits and peace of mind.
Don’t risk an “Intermountain-style” denial. Schedule a demo today.
