BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 1
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.
BDO KNOWLEDGE Tax Webinar Series High Growth and Start-up Companies: What You Need to Know About the R&D Credit from Day 1 Chris Bard, National Leader, R&D Tax Services, BDO USA, LLP
Jonathan Forman, Regional Leader, R&D Tax Services, BDO USA, LLP
Patrick Wallace, Regional Leader, R&D Tax Services, BDO USA, LLP
Jim Feeser, Senior Director, R&D Tax Services, BDO USA, LLP
February 20, 2014
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 3
CPE and Support CPE Participation Requirements ‒ To receive CPE credit for this webcast:
You’ll need to actively participate throughout the program. Be responsive to at least 75% of the participation pop-ups.
Certificate of Attendance: If you are logged in the entire time and respond to all participation pop-ups, you will be able to print your certificate from the “Participation” section at the end of the webcast. If you log out before printing your certificate:
BDO USA professionals ‒ CPE will automatically be issued in CPE Tracking & Reporting at the end of every week. A copy of your certificate will be sent after you have been issued credit.
All others will be emailed instructions on how to access your certificate.
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 4
CPE and Support (cont’d) Group Participation ‒ To receive credit:
Sign-in sheets must list a Proctor name and CPA license number. BDO USA professionals ‒ Submit your sign-in sheets using a General Training & Development Request
in BDO Service Now found at: BDOWorld > Applications & Resources > BDO Service Now > Click “Service Catalog” in the left menu, then under Training & Development, “Make a Request”.
Clients and contacts ‒ Email sign-in sheets to [email protected] within 24 hours of the webcast. Alliance members ‒ Should proctor their own group participants. This process is detailed in the
LearnLive Participant Guide, which can be found by searching “LearnLive Participant Guide” on the Alliance Portal. Call LearnLive Support below for questions.
Unfortunately, we cannot currently support group CPE for International Firms. Those wanting CPE must register and log in on their own computer.
Q&A: Submit all questions using the Q&A feature on the lower right corner of the screen. At the end of the presentation, the presenter(s) will review and answer all questions submitted. Technical Support: If you should have technical issues, please contact LearnLive:
Click on the Live Chat icon under the Support tab, OR Call: 1-888-228-4088
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 5
With You Today
Chris Bard National Leader, R&D Tax Services Chairman, Global R&D Center of Excellence BDO USA, LLP 1888 Century Park East Los Angeles, CA 90067 Direct: 310-557-7525 Mobile: 917-664-0637 [email protected]
Jonathan Forman Regional Leader, R&D Tax Services Managing Director, Global R&D Center of Excellence BDO USA, LLP 100 Park Avenue New York, NY 10017 Direct: 212-515-5441 Mobile: 626-272-6911 [email protected]
Patrick Wallace Regional Leader, R&D Tax Services BDO USA, LLP 1100 Peachtree Street NE, Suite 700 Atlanta, GA 30309 Direct: 404-979-7107 Mobile: 303-596-2394 [email protected]
Jim Feeser Senior Director, R&D Tax Services BDO USA, LLP 90 Woodbridge Center Dr., 4th Floor Woodbridge, NJ 07095 Direct: 732-734-1023 Mobile: 717-578-0482 [email protected]
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 6
Agenda What’s new in the R&D tax credit area?
Highlights and overview of the R&D credit
What should a start-up company be doing to prepare for the R&D credit?
As a start-up grows, organically and through acquisitions, domestically and internationally, what should it do to optimize its R&D credit?
Takeaways for start-up, high-growth, and other companies
Questions
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 7
What’s New in the R&D Tax Credit Area? Legislative Update
Projected credit renewal
Late 2014 or early 2015
Other chatter on the Hill regarding the R&D tax credit
Innovators Job Creation Act
• Permanent extension • Credit allowed against Alternative Minimum Tax • Permanent five-year carryback for small businesses • Election to report the Alternative Simplified Credit on amended
returns • Enhancements for certain start-up companies
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 8
R&D Tax Credit Overview and Highlights Corporations Claiming an R&D Credit for TY 2010 — Latest IRS Data
Page 8
Business Receipts 2010 2009 2008
$0 - $25,000 204,828,000 207,936,744 259,250,071
$25,000 - $100,000 16,433,000 22,043,881 23,218,552
$100,000 - $250,000 19,493,000 21,012,035 29,091,632
$250,000 - $500,000 25,339,000 23,785,262 33,853,558
$500,000 - $1,000,000 27,475,000 34,440,271 33,297,149
$1,000,000 - $2,500,000 59,325,000 68,593,386 84,405,115
$2,500,000 - $5,000,000 80,777,000 88,233,176 91,134,023
$5,000,000 - $10,000,000 103,572,000 78,049,047 96,910,397
$10,000,000 - $50,000,000 428,965,000 348,726,243 347,440,613
$50,000,000 - $100,000,000 200,295,000 199,425,262 182,220,867
$100,000,000 - $250,000,000 366,722,000 300,972,118 326,015,413
$250,000,000+ 6,977,509,000 6,380,761,726 6,796,531,701
Total 8,510,733,000 7,773,979,151 8,303,369,091
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 9
R&D Tax Credit Overview and Highlights (cont’d) Corporations Claiming an R&D Credit for TY 2010 — Latest IRS Data
Page 9
1 "Various Services" include educational services; health care and social assistance; arts, entertainment, and recreation;
accommodation and food services; and other services. Source: http://www.irs.gov/uac/SOI-Tax-Stats-Corporation-Research-Credit
Industry Credits Claimed # of Returns Average Claim
Manufacturing 5,554,490,000 5,808 956,352
Information 1,013,552,000 978 1,036,352
Professional, scientific, & technical services 797,473,000 3,900 204,480
Wholesale & retail trade 653,580,000 947 690,158
Finance & insurance 203,688,000 275 740,684
Management/holding companies 82,301,000 268 307,093
Utilities 45,659,000 62 736,435
Mining 42,318,000 45 940,400
Administrative, support & waste management 32,844,000 270 121,644
Other services, e.g., health, entertainment, hospitality 31,342,000 143 219,175
Real estate, rental, & leasing 18,577,000 75 247,693
Transportation & warehousing 14,757,000 40 368,925
Construction 11,675,000 96 121,615
Agriculture, forestry, fishing, etc. 8,477,000 34 249,324
Total and Average 8,510,732,000 12,941 657,656
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 10
R&D Tax Credit Overview and Highlights (cont’d) Corporations Claiming an R&D Credit for TY 2010 — Latest IRS Data
Page 10
Manufacturing Subsector Credits Claimed # of Returns Average Claim Computer and electronic 1,829,303,000 1,204 1,519,355 Chemical 1,344,341,000 722 1,861,968 Transportation equipment 1,009,000,000 362 2,787,293 Machinery 326,412,000 789 413,703 Miscellaneous 282,906,000 626 451,927 Electrical 260,361,000 533 488,482 Petroleum and coal 114,821,000 47 2,443,000 Food 90,844,000 279 325,606 Fabricated metal 80,987,000 504 160,688 Paper 75,370,000 82 919,146 Primary metal 35,312,000 125 282,496 Plastics and rubber 33,588,000 259 129,683 Nonmetallic mineral 23,802,000 60 396,700 Beverage and tobacco 12,401,000 18 688,944 Furniture and related 9,830,000 27 364,074 Printing and related activities 6,618,000 74 89,432 Textile 5,986,000 44 136,045 Wood 5,947,000 33 180,212 Apparel 5,349,000 16 334,313 Leather, etc. 1,312,000 5 262,400
Total and Average 5,554,490,000 5,808 956,352
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 11
1 Must be elected on a timely-filed, original return. 2 Because of the credit’s incremental nature, the option with the highest rate doesn’t necessarily
deliver the largest credit. 3 “Maximum Benefit” takes into account the IRC §280C requirement to either (1) reduce the deduction
for R&E expenses by the amount of the credit or (2) elect a reduced credit equal, generally, to 65% of the unreduced credit. This “§280C election” must also be made on a timely-filed, original return.
State R&D Credits Most of the 42 states with R&D incentives are based on federal rules, with modifications
More than 10 offer “refundable” or saleable incentives, e.g., NJ, CT, PA, IA
R&D Tax Credit Overview and Highlights (cont’d) Credit Benefit & Calculation
Federal R&D Credits “Base Amount” Rate2 Max.
Benefit3
Start-up Company Benefit
Regular Credit (Years 1984-1988)
Ratio of GRs over QREs times the prior 4 YR GRs less the current YR QRE compared to 50% of the current YR QRE (lower)
20% 6.50% (50% of current YR QRE)
Up to 6.50%
Alternative Simplified Credit (“ASC”)1
50% of average annual QREs for prior three tax years
14% 9.10% 6% (no QREs exist in any of the prior 3 tax YRs)
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 12
R&D Tax Credit Overview and Highlights (cont’d) What Activities Qualify? Four-Part Test
Intended to develop or improve the functionality, performance, reliability, or quality of a “business component,” i.e., a:
Product;
Process;
Software;
Through a process of experimentation designed to evaluate one or more alternatives to achieve a result where:
That process fundamentally relies on the principles of engineering or the physical, biological, or computer sciences
To eliminate technical uncertainty regarding the capability or method for developing or improving the business component, or the component’s appropriate design.
Technique;
Invention; or
Formula
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 13
Qualified Research — Examples:
Basic R&D
Product development
Manufacturing process improvements, e.g., to make things better, faster, cheaper
Software development, whether software is for sale, license, or internal use
Evaluating the efficiency of a third party’s technology to perform within an existing production process. Union Carbide
Specifying and integrating existing components into an overall design for a new system. Trinity
Additional design and engineering to modify molds purchased from third parties to produce desired components. TG Missouri
Page 13
R&D Tax Credit Overview and Highlights (cont’d) What Activities Qualify? (cont’d)
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 14
R&D Tax Credit Overview and Highlights (cont’d) What Activities Qualify? (cont’d)
Statutory Exclusions
Related to style; taste, except biological taste; cosmetic or seasonal factors
Relies on social science, arts, or humanities
Funded by an unrelated person or governmental entity
Conducted outside the U.S.
Management surveys, efficiency studies, market research, etc.
Routine data collection and ordinary quality control
Intended to develop software primarily for “internal-use.” Exceptions exist.
The following activities, unless they meet the four-part test outlined above:
After commercial production
Adapting an existing component to a particular customer’s requirements
Duplicating an existing business component
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 15
R&D Tax Credit Overview and Highlights (cont’d) What Expenses Qualify?
Qualified Research Expenses (“QREs”) Taxable wages for employees who perform or directly support or supervise
qualified research
Contract research expenses: 65%, 75%, or 100% of payments to contractors, depending on the nature and activity of the contractor, and provided the payments were not contingent on the activity’s success and the taxpayer retained substantial rights to the research’s results
Supplies used in qualified research - costs for tangible, personal property, not of a character subject to the allowance for depreciation
Computer rents/leases - Computer cannot be owned or on the premises
Recent Court Cases: Shami – direct supervision and documentation
FedEx – “internal-use software” and “Discovery Test”
GeoSyntec – “funded research” and economic risk
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 16
Start-ups: What Should We Be Doing? Considerations
Location
Legal Structure
Treatment of IRC sec. 174 costs
Expense vs. capitalize/amortize
Elections required on timely-filed, original returns Reduced credit (IRC sec. 280C)
ASC
Processes and procedures to identify and document QREs and qualified activities
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 17
High-Growth Companies: What Should We Do? Considerations - General
Location: state and non-U.S. R&D opportunities Some states offer refundable or saleable incentives
More than 30 other countries provide incentives for R&D activities
Many are more generous than U.S. incentives
Double-dip opportunities
Acquisitions and dispositions Cost-sharing agreements
To what extent does the agreement address U.S. R&D activities?
IPO and Exit Strategy — optimizing your R&D tax asset Employ an R&D methodology to complement growth
Robust data-driven methodology versus tax packages
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 18
High-Growth Companies: What Should We Do? (cont’d)
Considerations — How to Identify and Document QREs and Activities
Tie your facts to the law and to your documentation using the key test: process of experimentation
FACTS LAW DOCUMENTATION
Development Process Process of Experimentation (“POE”) Typical Documentation
1. Design Requirements
2. Design Specifications
3. Prototyping, Programming, Modeling
4. Testing
5. Redesign and Retesting
1. Business component/Permitted purpose
2. POE and uncertainty
3. POE
4. POE and technological in nature
5. POE and uncertainty
1. Design Requirement documents
2. Functional/Logical Design Specs
3. Drawings
4. Test plans, test results
5. Revised drawings, test plans and results
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 19
High-Growth Companies: What Should We Do? (cont’d) Considerations — How to Identify and Document QREs and Activities (cont’d)
Make it easy to see how non-core R&D departments are involved in your development process, understood as a process of experimentation:
Stages of Development Process / Elements of a Process of Experimentation
Department Design
Requirements Design Specs Prototyping/
Modeling Testing Redesign/ Retesting Production
Marketing x x
Concept and Feasibility x x x
R&D x x x x x
Engineering x x x x x
Manufacturing Engineering
x x
Manufacturing x x x
Quality Assurance x x x
Field Engineering x
Customer Service x
Administration x
Etc.
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 20
Takeaways
In General 2014 expenses
Who’s claiming R&D
Start-ups Location
Elections
Documentation
High-Growth Acquisitions and dispositions
Optimizing and protecting R&D credits
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 21
Questions
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 22
Conclusion Thank you for your participation!
Certificate Availability: If you participated the entire time and responded to at least 75% of the polling questions, click the “Support” button below to access the print certificate button. Group Participation Reminder ‒ to receive credit:
Sign-in sheets must list a Proctor name and CPA license number.
BDO USA professionals and Clients and Contacts – email sign-in sheets to [email protected] within 24 hours of the webcast.
Alliance Members ‒ should proctor their own group participants. This process is detailed in the LearnLive Participant Guide on Alliance Portal > Resource Center. Call LearnLive Support for questions at 1-888-228-4088.
Unfortunately, we cannot currently support group CPE for International Firms. Those wanting CPE must have registered and participated from their own computer.
Please exit the course by clicking the “Exit” button in the lower right corner.
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1
Page 23
Speaker Biographies
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 24
Chris Bard National Leader, R&D Tax Services Chairman, Global R&D Center of Excellence
EXPERIENCE SUMMARY For 20 years Chris has worked full time in the area of U.S. federal, state, and non-U.S. R&D tax services. He has identified more than $1 billion in R&D benefits for companies in virtually every industry and supported over 90% of those benefits on exam or at appeals. Formerly with PricewaterhouseCoopers, LLP, Chris has designed and implemented procedures and technologies for large-, mid-, and small-cap companies to identify and document their R&D costs and activities in the most efficient and effective manner. During this time, he has: Increased his clients’ R&D benefits by more than 100%,
on average; Assisted scores of companies implement FIN 48 for R&D
credits; Analyzed the R&D, manufacturing, software
development, and other operations and documentation systems of 100s of businesses;
Interviewed 100s of engineers, scientists, and software developers regarding their R&D and R&D-related activities;
Worked closely with more than 100 IRS and state tax examiners, appeals officers, engineers, CAS, counsel, etc., across the U.S.;
Designed software and procedures to optimize the process of identifying and documenting R&D activities and costs; and
Been published in a variety of media including The Wall Street Journal, Tax Executive, Washington Business Journal, CFO.com, and others.
PROFESSIONAL AFFILIATIONS California State Bar Association The World Is Just a Book Away Foundation, since 2008, Director
EDUCATION J.D., Taxation, Boalt Hall, University of California, Berkeley M.A., University of Illinois, University Fellow B.A., Georgetown University summa cum laude
[email protected] Direct: 310-557-7525 Mobile: 917-664-0637 1888 Century Park East Los Angeles, CA 90067 www.bdo.com
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 25
Jonathan Forman Regional Leader, R&D Tax Services Managing Director, Global R&D Center of Excellence
EXPERIENCE SUMMARY Jonathan has been involved with R&D for 18 years in both technical and taxation capacities and brings a scientific, IT, and business background to our R&D practice. Jonathan has extensive knowledge of both U.S. and international R&D tax law. Prior to joining BDO, Jonathan spent six years with Big 4 firms in the United States and Canada. He created and led the R&D incentives practice for Deloitte & Touche in Calgary, Canada where his practice focused on technology, oilfield services, and exploration and production. In addition, he was the leader of the Energy Industry segment for R&D incentives in Canada. Before specializing in R&D tax, Jonathan designed and led teams in the development of several large multi-platform, n-tier software applications for corporate tax departments. These applications included solutions for managing and documenting R&D incentives, managing maintenance and compliance with global withholding regulations, and maintaining a large-scale like-kind exchange program.
Prior to joining Big Four accounting firms, Jonathan was a software applications developer and team leader at MCK Communications (“MCK”), a telecommunications company in Newton, MA. Jonathan has extensive experience dealing with specific issues related to R&D credits and incentives within multiple industries including software, energy, life sciences, telecom, and manufacturing. He specializes in maximizing software and technology related R&D claims, including internal-use software, and identifying international incentives.
EDUCATION M.B.A., Centre for Innovative Management, Athabasca University B.Sc., Biological Science, University of Calgary
[email protected] Direct: 212-515-5441 Mobile: 626-272-6911 100 Park Avenue New York, NY 10017 www.bdo.com
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 26
Patrick Wallace Regional Leader, R&D Tax Services
EXPERIENCE SUMMARY Patrick is a Senior Director with BDO’s R&D Tax Services Practice for our Atlantic, Central, and Southeast U.S. Regions. Patrick has 13 years of experience advising clients on federal and state tax matters. He has extensive experience leading the implementation of R&D tax credit studies. Patrick has advised a range of small privately held to billion dollar publicly traded companies in an array of industries including engineering, consumer products, food products, defense, software, and a variety of manufacturers. He worked with these companies to identify, document, and calculate their R&D related tax benefits in the most efficient and effective manner. Before joining BDO, Patrick was the Managing Director of Tax Consulting for a professional services firm that specialized in R&D tax credit incentives.
Prior to that, he was with KPMG where he delivered high value services to public and private companies of various sizes in a wide range of industries in the areas of tax compliance, tax consulting, transaction structuring, due diligence, and accounting for income tax consulting.
PROFESSIONAL AFFILIATIONS American Institute of Certified Public Accountants Georgia Society of Certified Public Accountants
EDUCATION Masters, Taxation, University of Denver B.A., Transylvania University
[email protected] Direct: 404-979-7107 Mobile: 303-596-2394 1100 Peachtree Street NE, Suite 700 Atlanta, GA 30309 www.bdo.com
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1 Page 27
Jim Feeser Senior Director, R&D Tax Services
EXPERIENCE SUMMARY Jim is a Senior Director with BDO’s R&D Tax Services Practice for our Northeast U.S. Region. Jim has 15 years of experience in the area of U.S. federal, and state, R&D tax services. He has identified billions in R&D benefits for companies in virtually every industry and supported those benefits. Prior to joining BDO, Jim spent 13 years with Deloitte Tax LLP, where he was fully dedicated to the R&D tax credit. Also, during that time he was responsible for managing, designing and implementing a technology platform and processes to identify and document R&D costs and activities across the US. Jim has served companies ranging from multibillion dollar multinational companies to small privately held U.S. based companies. He has worked with these companies to identify, document, and calculate their R&D benefits in the most efficient and effective manner. He has conducted interviews with engineers, scientists, and software developers regarding their R&D and R&D-related activities and managed various IRS and state tax examinations.
PROFESSIONAL AFFILIATIONS American Institute of Certified Public Accountants New Hampshire Certification of Public Accountants
EDUCATION B.S., Widener University - Accounting
[email protected] Direct: 732-734-1023 Mobile: 717-578-0482 90 Woodbridge Center Dr., 4th Floor Woodbridge, NJ 07095 www.bdo.com
BDO KNOWLEDGE Tax Webinar Series ‒ High Growth & Start-Up Companies: What You Need about the R&D Tax Credit from Day 1
Page 28
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 49 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multinational clients through a global network of 1,264 offices in 144 countries. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. www.bdo.com To ensure compliance with Treasury Department regulations, we wish to inform you that any tax advice that may be contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein. Material discussed in this publication is meant to provide general information and should not be acted on without professional advice tailored to your individual needs. © 2014 BDO USA, LLP. All rights reserved. www.bdo.com
