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Cost Segregation Cost Recovery Cost Savings Financing

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					                                                   Federally Funded
Best Bottom Lines, LLC
                                                Research & Development
                                                      Tax Credits


                          These Underutilized Wage Based Tax
                          Credits for Businesses through out
                          the United States & Canada Create an
                          Increase in Cash Flow




                         This document and/or electronic file contains information that (a) is or may be
                         LEGALLY PRIVILEGED, CONFIDENTIAL, PROPRIETARY IN NATURE, OR
                         OTHERWISE PROTECTED BY LAW FROM DISCLOSURE, and (b) is intended
                         only for the use of Best Bottom Lines, LLC. You must have written authorization
                         from Best Bottom Line, LLC to use, copy, or distribute any part of this document
                         as it is strictly prohibited.
Best Bottom Lines, LLC

                               R&D Tax Credit – IRC §41
                            In December 2001, new tax regulations enabled small to mid-size
                             companies to be eligible to take the R&D (wage-based) Tax Credits.

                            Documentation and Discovery requirements were relaxed.

                            The goal was to keep innovation and creativity in the U.S. and
                             encourage economic growth.



                            Clients can now receive cash back and/or tax credit benefits for
                             conducting technical activities and meeting the tax regulation
                             requirements.
Best Bottom Lines, LLC

                         About Best Bottom Lines, LLC

                            Represents a National Tax Recovery Consulting Firm based out of
                             Troy, MI
                            Specializing in Engineering-Based Tax Studies such as: R&D,
                             Cost Segregation and Energy Efficiency Studies
                            Unique staff made up of legal, tax and engineers made up of:
                             mechanical, chemical, electrical & structural needed to fully
                             maximize tax benefits.
                            All of our work will withstand IRS scrutiny and is backed by an
                             unlimited audit defense guarantee
Best Bottom Lines, LLC
                         New or Improved Business
                         Component
                         A business component can be a product or a process, and can include the
                         following:

                          Manufacturing products                         • Performing environmental testing
                          • Developing new, improved, or more reliable   • Developing, implementing, or
                          products / processes / formulas                upgrading systems and/or software
                          • Developing prototypes or models (including   • Automating and/or streamlining
                          computer generated models)                     internal processes
                          • Designing tools, jigs, molds, and dies       • Expending resources on outside
                          • Developing or applying for patents           consultants/contractors to do any of
                          • Performing certification testing             the above-stated activities
                          • Conducting testing of new concepts &         • Attempting the use of new materials
                            technology                                   and compounds
                          • Developing and introducing new
                            technology
                          • Developing or improving
                          production/manufacturing processes
Best Bottom Lines, LLC

                         Technological in Nature
                         The taxpayer is seeking information that is
                         technological in nature:



                         • Nature component is based on the process of
                         experimentation used in the research relying on the
                         principles of hard sciences, such as physical or
                         biological sciences, engineering, or computer
                         science.
Best Bottom Lines, LLC

                         Elimination of Uncertainty
                            The research and development activities
                          must eliminate uncertainty either about the
                          capability or method of developing the
                          product.

                           In addition, the elimination of certainty of
                          the improvement of the product or its
                          appropriate design is also sufficient to meet
                          this requirement.
Best Bottom Lines, LLC

                         Process of Experimentation
                            The Process of Experimentation involves
                             the evaluation of one or more alternatives
                             where there exists uncertainty at the outset
                             as to the appropriate design of the
                             business component.

                             The Taxpayer may conduct a process of
                             evaluating the alternatives through
                             systematic trial and error, developing one
                             or more hypotheses, designing and
                             conducting experiments to test the
                             hypotheses, among other things.
Best Bottom Lines, LLC

                         Eligible Costs
                         Wages
                           - Form W-2, Partnership Earnings subject to Self Employment
                             Tax, Schedule C, bonuses paid to employee excludes 401(k)
                             & fringe benefits


                         Supplies
                           - Cost to fabricate prototypes / items consumed in R&D process Any
                           tangible property used in the conduct of qualified research other than
                           land or improvements to land, and property subject to depreciation


                         65% of Contract Research
                            - Fees paid to non-employees, outside
                           consultants / engineers / software developers
Best Bottom Lines, LLC

                         The Process
                                           Preliminary
                                            Analysis


                                             Project
                                          Identification


                                             Data          Projects &
                            Financials
                                           Collection      Activities


                           Employee R&D    Interviews      Qualified
                            Allocations                    Projects


                                             Credit
                                          Calculations



                                           Reporting
Best Bottom Lines, LLC

                         Qualifying Clients

                                    Manufacturing
                                      Fabrication
                                     Engineering
                                       Chemical
                                     Tool and Die
                                   Machine Shops
                                Software Development
                                      Electronics
                                    Biotechnology
                                   Pharmaceutical
Best Bottom Lines, LLC
                         Ex: Manufacturing Co. #1
                         Automotive Prototyping
                         Sampling of activities:
                            – Plastic part manufacturing,
                            – Rapid prototype modeling,
                            – Design – AutoCAD,
                            – Aluminum prototype tooling,
                            – Silicone tooling,
                            – Injection, Blow, Compression molding,
                            – Vacuum forming


                         Annual Payroll
                             2003 – $2MM
                             2004 – $3MM
                             2005 – $4MM
                             2006 – $5MM

                         Net Credit Benefit for 2003 thru 2006 tax years:
                         $200,000
Best Bottom Lines, LLC

                             Ex: #2 Manufacturing Co. Metal Product
                             Fabrication

                         Sampling of activities:
                            – Grinding
                            – CAD Drawings
                            – Electro Mechanics
                            – Vibratory Deburring
                            – Hardware Insertion
                            – Laser Technology
                            – Machining


                              Annual Payroll

                              –      2003 – $6MM
                              –      2004 – $7MM
                              –      2005 – $8MM
                              –      2006 – $9MM

                            Net Credit Benefit for 2003 thru 2006tax years:
                             $500,000
Best Bottom Lines, LLC

                         Ex: Software Co
                         Sampling of activities:
                            • Designing software
                            • Coding
                            • Programming
                            • Improving application features
                            • Functionality improvements
                            • Alpha, beta testing
                            • Improving Modules

                         Annual Payroll
                                2003 – $5MM
                                2004 – $6MM
                                2005 – $7MM
                                2006 – $8MM

                         Net Credit Benefit for 2003 thru 2006 tax years:
                         $500,000
Best Bottom Lines, LLC

                         Ex: Engineering Co.
                         Sampling of activities:
                            – Pipe and Filtration Systems
                            – Prototyping
                            – Solvent and Adhesive bonding
                            – Quality Assurance
                            – Thermoforming Process
                            – Designing systems and products
                            – Developing layouts and schematics
                            – Testing and Failure analysis


                              –   Annual Payroll
                              –   2003 – $10MM
                              –   2004 – $11MM
                              –   2005 – $12MM
                              –   2006 – $13MM

                         Net Credit Benefit for 2003 thru 2006 tax
                            years: $700,000
Best Bottom Lines, LLC

                         The Final Product                    ABC, Inc.
                                                                                    R&D Tax
                                                                                   Credit Study
                                                              1234 Research Lane   2002 – 2005
                                                              Houston, TX 77000     Tax Years


                         The R&D Study / Technical Report

                         • The R&D Study / Technical
                         Report is where all the arguments,
                         documentation of qualification
                         and quantification must coalesce
                         into a coherent statement of who,
                         why, when, where and how much.

                         • The Study will convey the credit
                         being taken and the basis for such
                         amount.

                         • For a credit with varying
                         qualitative issues, the report is
                         critical
  Form 6765
Best Bottom Lines, LLC
Best Bottom Lines, LLC

                         State R&D Tax Credits

                         Arizona         Michigan (Office)
                         Arkansas        Minnesota
                         California      Montana
                         Colorado        New Jersey
                         Connecticut     New Mexico
                         Delaware        North Carolina
                         Georgia         North Dakota
                         Hawaii          Ohio
                         Idaho           Pennsylvania
                         Illinois        Rhode Island
                         Indiana         South Carolina
                         Iowa            Texas (Office)
                         Kansas          Utah
                         Louisiana       Vermont
                         Maine           West Virginia
                         Maryland        Wisconsin
                         Massachusetts   Washington
Best Bottom Lines, LLC

                         Benefits to Clients
                         • Significant credits/cash back from
                         previous 3 open years

                         • $1 for $1 reduction on current year’s
                         taxable liability

                         • Additional tax savings in the future

                         • Unutilized credits are carried back 1
                         year and then
                           carried forward up to 20 years

                         • Increase company assets and value
Best Bottom Lines, LLC

                          What’s Next?
                         I.     Conference Call / Visit with Clients / CPA Firm
                         II.    Setup office visit with the CPA Firm (Tax
                                Partners/Managers) and/or with the Prospective
                                Client (CEO/CFO/President)
                         III.   Feasibility Analysis
                         IV.    Initiate the Study
Best Bottom Lines, LLC

                         Frequently Asked Questions
                         •   What type of background and expertise is necessary to successfully provide the service?
                              The R&D Tax Credit team must have the technical (engineering) and legal expertise to quantify or qualify the credit.
                              Numerous CPA’s across the country outsource this highly specialized service to our team.

                            Our Clients have never documented employees activities/time. Is that a concern?
                              No. Through our interview process, we collect and document the necessary information required by the code/IRS.

                            What if the shareholders are in AMT situation?
                              The un-utilized credits are carried back 1 year and then carried forward up to 20 years.

                            How does our team get paid?
                              For previous 3 open years, our fees are contingency based. If we can’t help you realize any benefits, we don’t get
                              paid. For current and future years, due to IRS Circular 230, we charge a fixed fee.

                            How long does it take for the Client to realize the benefits?
                              For previous 3 open years, it takes 3 – 4 months after amending returns to receive cash back from the IRS for
                              taxes paid. For current year, the benefit is realized upon filing, which is $1 for $1 reduction on taxable liability.

                            Will this project disrupt the employee’s or the CPA’s daily
                             activities?
                              –    Our process is strategically designed so that it takes a total of
                              5 to 10 hours of client time – technical interview. This includes a
                              few hours with the company’s chief engineer(s), and a hour or
                              two with the controller/CFO and the CPA.
Best Bottom Lines, LLC

                         Contact Information

                            Best Bottom Lines, LLC
                            Bruce Etterling, CEO
                            Tel: (888) 598-9667
                            FAX: (888) 817-0921
                            BEtterling@bestbottomlines.com

				
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