Before hiring a tax-credit consultant, define the evidence deliverable

A credit-study proposal should identify the specific program, taxpayer, periods and factual questions to be investigated. Ask the consultant which activities and costs it will examine and what evidence the company must supply. A projected benefit before that investigation is a proposal assumption, not established eligibility.

Require the consultant to explain exclusions and conditions that could reduce or eliminate the claim. Avoid an engagement whose only apparent deliverable is a large credit number. Management and the return preparer need to understand why the facts support the treatment and which elements remain uncertain.

Ask for a description of interviews, document review, sampling and calculation methods appropriate to the program. Identify who verifies factual representations and how conflicting evidence is handled. If the consultant relies on employee recollections, ask how those statements are recorded and connected to the relevant period.

The IRS written-advice regulations require reasonable assumptions and attention to relevant facts for covered federal tax advice. Use that principle to request a study connected to your business records. A generic eligibility narrative reused across clients does not establish that your company's facts have been investigated.

Specify the records the company receives: reviewed factual inputs, calculation schedules, technical explanation, source references and unresolved issues. Resolve proprietary-template restrictions before starting. The return preparer should be able to evaluate the proposed claim without relying solely on the consultant's sales summary.

Ask the return preparer to identify the evidence and review it will require before using the study. Confirm whether that review is included in its fee. The consultant and preparer may have different roles, and the company should not discover their disagreement only when a filing deadline is near.

IRS preparer guidance makes clear that the taxpayer remains accountable for reported items. Require management to receive significant limitations and disagreements directly. If the consultant recommends a claim the preparer will not accept, resolve the factual and technical differences before commissioning a filing elsewhere.

Ask how the fee is calculated, when it becomes payable and what happens if the claim is reduced, withdrawn, delayed or challenged. Identify whether compensation depends on a claimed amount, realized benefit or completed work. Have qualified advisers assess applicable professional and legal restrictions on the actual arrangement.

Include costs outside the study, such as amended returns, additional state work, notices or later representation. A promise of audit support needs a defined professional, scope and period. Ask whether support means providing the file, answering questions or representing the taxpayer in a particular proceeding.

Review whether the deliverables address the agreed factual questions and reconcile calculations to the supplied records. Have the appropriate professional assess the technical conclusion. A smaller supported claim or a conclusion that the evidence is insufficient can be a legitimate result of competent work.

Ask how the consultant records activities or costs rejected during its study. Retaining the reason for exclusion helps the preparer understand the complete analysis and prevents later staff from adding rejected items back without review.

Retain the approved study, factual representations, preparer review and filed treatment together. Record who monitors later correspondence and how additional work is authorized. Do not describe the consultant's work as a government approval or a guarantee that the claim will survive examination.