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For businesses

Plain-language questions a business can ask an R&D tax adviser about fees before signing, and where to find practical guidance.

KnowYourFees.org is also published by Swanson Reed.

On this page
  1. Questions to ask an adviser about fees
  2. How is the fee calculated?
  3. What would the fee be on a smaller or larger claim?
  4. When is the fee payable?
  5. What happens to the fee if the IRS reduces or disallows the credit?
  6. Who pays the tax, interest and penalties if the claim does not hold?
  7. Is support in an IRS examination included?
  8. Who will prepare and who will review the claim?
  9. What documentation will I receive?
  10. Are there any other fees or payments?
  11. A model to compare against
  12. Sources

This site is mainly about policy: how R&D tax advisers are paid and what the rules should be. If you run a business and are thinking about an R&D tax credit claim, the practical guidance is on KnowYourFees.org, a Swanson Reed site. It covers what a contingent fee is and how it is calculated, the questions worth asking before signing, how to read the indemnity and audit support clauses in an engagement letter, and what happens if a claim is examined.

Swanson Reed publishes both sites and has a commercial interest in how advisers are paid, as explained on our conflicts of interest page. Nothing here is advice about your own circumstances.

Questions to ask an adviser about fees

These questions are a starting point. A good adviser, whatever their fee basis, should be able to answer them clearly and in writing.

How is the fee calculated?

Ask whether the fee is fixed, hourly, or a percentage of the credit. If it is a percentage, ask whether it is a percentage of the credit claimed or of the credit finally allowed, and whether there is a cap or a minimum.

What would the fee be on a smaller or larger claim?

Ask for the fee at two or three different credit amounts. For example, and purely as an illustration, on a credit of $100,000 a 20 percent fee would be $20,000, and on a credit of $200,000 it would be $40,000. A fixed fee would stay the same in both cases.

When is the fee payable?

Ask whether you pay on signing, when the claim is delivered, when it is filed, or when a refund is received.

What happens to the fee if the IRS reduces or disallows the credit?

Ask whether any of the fee is refunded, how "allowed" is defined, and for how long that promise lasts.

Who pays the tax, interest and penalties if the claim does not hold?

Ask the adviser to explain in writing which costs stay with your business if the credit is reduced or disallowed. The Internal Revenue Code imposes a penalty of 20 percent of the excessive amount on the person making a refund claim for an excessive amount, unless the excess is due to reasonable cause.1Source 126 U.S.C. section 6676(a), United States Code, 2024 edition, GovInfo. https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap68-subchapB-partI-sec6676.htm (accessed 11 October 2026).

Is support in an IRS examination included?

Ask what it covers, who provides it, how long it lasts, and whether it costs extra.

Who will prepare and who will review the claim?

Ask for names and credentials. Circular 230 lists who may practice before the IRS, including attorneys, certified public accountants and enrolled agents.2Source 2Treasury Department, Circular No. 230, Regulations Governing Practice before the Internal Revenue Service (Rev. 6-2014), 31 CFR section 10.3 (Who may practice). https://www.irs.gov/pub/irs-pdf/pcir230.pdf (accessed 11 October 2026). The IRS requires anyone who prepares or assists in preparing federal tax returns for compensation to have a valid preparer tax identification number.3Source 3Internal Revenue Service, PTIN requirements for tax return preparers. https://www.irs.gov/tax-professionals/ptin-requirements-for-tax-return-preparers (accessed 11 October 2026).

What documentation will I receive?

Ask for the completed Form 6765, a written description of each business component and its research activities, and the calculation of qualified research expenses. For a refund claim, the IRS requires the business components, the research activities and the total qualified research expenses to be identified when the claim is filed.4Source 4Internal Revenue Service, Research credit claims (Section 41) on amended returns frequently asked questions. https://www.irs.gov/businesses/corporations/research-credit-claims-section-41-on-amended-returns-frequently-asked-questions (accessed 11 October 2026).

Are there any other fees or payments?

Ask about expenses, referral fees, commissions or any payment the adviser receives from anyone else in connection with your claim.

A model to compare against

Our model fee disclosure statement shows how the answers to these questions could be set out in one place in an engagement letter.

Sources

  1. 26 U.S.C. section 6676(a), United States Code, 2024 edition, GovInfo. https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap68-subchapB-partI-sec6676.htm (accessed 11 October 2026).  Back
  2. Treasury Department, Circular No. 230, Regulations Governing Practice before the Internal Revenue Service (Rev. 6-2014), 31 CFR section 10.3 (Who may practice). https://www.irs.gov/pub/irs-pdf/pcir230.pdf (accessed 11 October 2026).  Back
  3. Internal Revenue Service, PTIN requirements for tax return preparers. https://www.irs.gov/tax-professionals/ptin-requirements-for-tax-return-preparers (accessed 11 October 2026).  Back
  4. Internal Revenue Service, Research credit claims (Section 41) on amended returns frequently asked questions. https://www.irs.gov/businesses/corporations/research-credit-claims-section-41-on-amended-returns-frequently-asked-questions (accessed 11 October 2026).  Back