Cost Segregation

Federal guidance concerning cost segregation hinges on the IRS Audit Techniques Guide, which is the playbook for auditors who review its application.  A recent comparison of documents from ten nationally competing service providers found a compliance rate of only 54%.  Most companies are taking shortcuts that put the client at risk, but RPTI is 100% compliant every time. 

The IRS Audit Guide identifies the “Principal Elements of a Quality Cost Segregation Study” as follows:

1. Preparation By An Individual With Expertise and Experience
2. Detailed Description Of The Methodology
3. Use of Appropriate Documentation
4. Interviews Conducted With Appropriate Parties
5. Use Of A Common Nomenclature
6. Use Of A Standard Numbering System
7. Explanation Of The Legal Analysis
8. Determination Of Unit Costs And Engineering “Take-Offs”
9. Organization Of Assets Into Lists Or Groups
10. Reconciliation Of Total Allocated Costs To Total Actual Costs
11. Explanation Of The Treatment Of Indirect Costs
12. Identification And Listing Of § 1245 Property
13. Consideration Of Related Aspects (e.g. I.R.C. § 263A, Change in Accounting Method And Sampling Techniques)

Does the competition include all the necessary items?  ASK THEM TO SHOW YOU THEIR DOCUMENT.