IRC Section 199: Deduction for Domestic Production Activities – A 2015 Update
One of the biggest tax breaks for manufacturing firms, the 'Manufacturing Deduction', is available under Section 199 of the tax code. Some manufacturers may not be entitled to claim this tax deduction. Hence, to eliminate the confusion, the Large Business and International (LB&I) division of the IRS has issued new guidance for auditors.
The Knowledge Group assembled a panel of thought leaders and professional speakers that will provide an overview of the changes in the Rule and, help companies and their counsel understand which entities can claim the Manufacturing Deduction and under what conditions and circumstances under Section 199 Rule in Manufacturing Contracts.
Key topics include:
- Section 199 Overview
- Qualified Production Activities Income (QPAI)
- Key Provisions on Domestic Production Activities Deduction
- New IRS Guidelines
- Tax Regulations
- Two Key Certifications
- Manufacturers Eligibility
- Benefits and Burdens
- IRS Audit Guides: Insights
Michael Solomon, Partner
Fenwick & West LLP
- How does one distinguish between production activities that are substantial in nature and those that are minor or immaterial combination or assembly of components?
- How should section 199 apply in the context of SAAS products, and what arguments should be made on audit to qualify the SAAS revenue as DPGR?
- Revenue and Cost allocation techniques to maximize QPAI where a single price is charged for QPP with embedded services.
- Techniques to avoid wage and TI limitations on the section 199 deduction.
Ronald G. Wainwright, Jr., Partner - Tax
Cherry Bekaert LLP
- Understand the history, application and calculation of the domestic production activities deduction
- Understand the complexities, challenges, and parameters in calculating the deduction
- Become better able to identify clients who can benefit from this deduction
Michael J. Devereux II, CPA, CMP, Partner and Director of Manufacturing & Distribution Services
- Discuss how taxpayers determine whether they have the benefits and burdens of ownership when multiple parties are involved in the same economic activity.
- Discuss how the IRS directives impact taxpayers in determining whether they have the benefits and burdens of ownership with respect to contracts with their customers and vendors.
- Discuss how taxpayers may exclude §174 research expenditures in determining whether an item is manufactured by the taxpayer in whole or in significant part within the U.S.
Who Should Attend:
- Manufacturing Firms
- Tax Attorneys
- Tax Executives and Directors
- Tax Advisers
- Tax Preparers
- Tax Compliance Officers
- Other Related/Interested Professionals and Organizations
Michael F Solomon is a partner in the tax group at Fenwick & West in San Francisco, California. He is one of the top tax advisers in the U.S. with respect to both domestic and international tax issues, representing many Fortune 100 companies. He has also been a professor at both Georgetown University Law Center and the University of California at Berkeley (Boalt Hall) teaching tax courses at these institutions. Mr. Solomon is admitted to practice in front of the U.S. Supreme Court, a number of federal circuit courts of appeal, the U.S. Court of Federal Claims, and the U.S. Tax Court. He has handled well over 200 cases against the Internal Revenue Service in administrative hearings and in litigation. He is best known, however, for his broad tax planning skills and his ability to find simple solutions to the most difficult and complex tax issues. In addition to being a frequent speaker in front of tax audiences, he has testified at Congressional hearings on tax matters and has authored a number of articles in various tax publications.
Mr Solomon is a graduate of both Yale University and Harvard Law School and a former chair of the Tax Accounting Committee of the American Bar Association’s Tax Section.
Michael F Solomon is a partner in the tax group at Fenwick & West in San Francisco, California. He is …
A Tax Partner with more than 25 years of experience in the area of taxation, Ron serves a diverse client base including multi-national, public and closely held companies. Clients who depend on Ron’s guidance inhabit a number of industries including manufacturing, distribution, technology and life sciences, real estate and construction, and private equity. Based in the Firm’s Raleigh office, Ron guides clients through a number of taxation matters including international and domestic tax, provisions, FIN 48, tax controversy and complex transactional matters. A leader of Cherry Bekaert’s Federal Credits & Incentives practice, Ron has extensive practical experience bringing value to clients.
Prior to joining Cherry Bekaert, Ron was a Tax Partner with an international firm for ten years, followed by several years with a regional firm. During his career, Ron spent seven years in a national tax role in Washington, D.C., focusing on domestic and international tax issues, mergers and acquisitions and IRS tax controversy matters.
A Tax Partner with more than 25 years of experience in the area of taxation, Ron serves a diverse client …
Mike Devereux joined Mueller Prost in 2000 in the firm’s tax department. As an energetic and ambitious accountant with an outstanding passion for tax, Mike has demonstrated leadership and exceptional judgment in the tax structuring of various acquisitions, has led hundreds of R&E Tax Credit study engagements, and is lead coordinator for Mueller Prost’s special tax incentives program. He is frequently asked to speak to various professional and industry trade organizations and associations about opportunities to reduce federal and state tax liabilities.
Prior to joining Mueller Prost, Mike worked for his father’s CPA firm beginning at the age of 13, thus setting the stage for a career in public accounting. His fervor for tax legislation that impacts his clients is unmatched and drives his pro-active approach to serving clients.
Mike Devereux joined Mueller Prost in 2000 in the firm’s tax department. As an energetic and ambitious accountant with an …
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About Fenwick & West LLP
Fenwick & West has achieved a reputation as having one of the nation's leading domestic and international tax practices, and awarded with First Tier status as one of the “World’s Leading Tax Planning Firms” and as one of the “World’s Leading Transactional Firms” by International Tax Review in 2014. The tax group's exciting and sophisticated practice stems from its client base with representation in every geographic area of the United States, as well as a number of foreign countries. With more than 20 tax attorneys with a broad range of corporate, partnership and international tax experience, the firm has represented well over 50 Fortune 100 companies in major federal tax matters, and 100 of the Fortune 500 companies. Fenwick’s tax group has extensive experience in tax controversy and tax litigation matters, international tax planning and have recently worked on over $150B in M&A, spinoff and joint venture activities.
About Cherry Bekaert LLP
As a nationally recognized, growth-oriented firm, Cherry Bekaert has the resources to take your business as far as you want to go. The Firm's industry specialists already know your marketplace, so they can help you make the most of emerging opportunities while minimizing compliance headaches. With our down-to-earth style and wealth of practical advice, you will find Cherry Bekaert an indispensable part of your team.
Ranked among the largest accounting firms in the country, Cherry Bekaert offers specialized solutions that help advance our clients' business goals. For more than 65 years, global corporations, private businesses, government entities, nonprofits, emerging firms, start-ups and successful individuals have relied on Cherry Bekaert to guide them forward as their growth advisor.
Cherry Bekaert LLP is an independent member of Baker Tilly International. Baker Tilly International is the world’s 8th largest accountancy and business advisory network by combined fee income of its independent members. Baker Tilly International member firms specialize in providing accountancy and business advisory services to entrepreneurial, growing businesses and mid-market listed corporates worldwide. | cbh.com
About Mueller Prost
Mueller Prost is a team of CPAs and business advisors who provide a full range of professional tax, audit, accounting and management advisory services. The firm serves individuals and businesses across several industries, including Manufacturing, Distribution, Healthcare, Not-for-Profit, Real Estate, Construction, Retail, Hospitality and many more. From its inception in 1983, the firm has grown to become one of the leading locally-owned public accounting firms in the St. Louis area and employs over 100 professionals and staff. The firm operates from offices located in St. Louis and St. Charles, Missouri and Irvine, California – serving clients nationwide.