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Original Invoice+Infusion=QRE Recognition

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QRE transformative Solution


SMaRTi™ automates QRE's by dynamically infusing multiple layers of:

  • IRS 26 U.S. Code § 41 (Research) Investment Credit Qualification,
  • IRS 26 U.S. Code § 38 Sec. 46 (Inv) Investment Credit Qualification and
  • IRS 26 U.S. Code § 38 Sec. 41 (Research) Research Expense Qualification

with Codes of Federal Regulations requirements directly into the invoicing workflow process-

verified by entities D-U-N-S numbers.


By doing so, it bypasses the traditional percentage limitations, caps, and aggregation restrictions found in conventional systems. Its real-time, “100 percent dollar-for-dollar” crediting mechanism converts every dollar of QRE into an immediate reduction in tax liability—transmuting a deferred benefit into ready-to-use liquidity.


I. Real-Time Identification and Validation of QREs


  • Automated Data Capture: Every invoice in SMaRTi™ is scanned for expense items that qualify as Qualified Research Expenses  (QREs) infusion. Each automated line item is queried under the IRS-defined criteria for research and development spending.


  • Regulatory Cross-Check: For each QRE, SMaRTi™ automatically cross-references multiple iterations of rules embedded in the Internal Revenue Code (IRC) and the Code of Federal Regulations (CFR).


  • Entity Identification: By associating each invoice with a D-U-N-S number (and/or Unique Entity Identifier), the system ensures that the validation is entity-specific.


This deep integration within the invoicing workflow means that by the time an invoice is finalized, every QRE line item has been vetted and approved in real time, eliminating the delays and uncertainties typical of manual or end-of-year reconciliations.


II. Direct, Immediate Conversion into Tax Liability Reduction


  • Eliminating Deferred Recognition: Traditionally, QREs are recorded as deferred tax assets—benefits realized only at period-end or during tax filing. SMaRTi™, however, converts each dollar spent on qualified research immediately into a tax credit.


  • Overcoming Traditional Hurdles: Conventional tax credit systems impose percentage limitations, subject you to caps, or enforce aggregation rules that prevent full immediate crediting. In contrast, SMaRTi’s "100 percent dollar-for-dollar" mechanism bypasses these hurdles entirely.


  • Direct Pay Mechanism: Once a QRE is validated, SMaRTi™ posts the corresponding credit directly to the invoicing record. This acts as a direct pay against the tax liability. As soon as the invoice is generated, the tax credit is applied immediately—transforming the accounting treatment from a deferred benefit into an immediate reduction.

 

III. Integrated Invoicing Workflow with Compliance by Design


  • Dynamic Rule Engine: At its core, SMaRTi™ employs an algorithm that is documented and validated under IRC 6001 to meet all four criteria-qualifies as a QRE. Each issued invoice is automatically enriched with the latest IRC and CFR regulatory interpretations, while advancing the principles of the UN Sustainable Development Goals (SDG), pursuant a 5PL structure—under NAICS 541614— combined with its SMaRTi® process.


  • Systematic Financial Optimization: By integrating this process directly into the financial workflow, the system avoids traditional reconciliation bottlenecks. Rather than waiting for a consolidated end-of-year tax computation, each invoice becomes a live document reflecting real-time tax liability adjustments.


  • Operational Efficiency and Liquidity Boost: This immediate credit mechanism not only ensures compliance but also transforms the tax credit into an operational asset. Companies can immediately deploy these funds—savings from the reduced tax liability—to further enhance research activities or bolster operational initiatives. Such integration means no additional manual steps are required to realize the value of the tax credits.


 Instead of capital being locked up as a deferred asset waiting for annual settlement (with the attendant risks of percentage limitations, caps, or aggregation thresholds), the company has those funds available immediately—

optimizing cash flow and fostering reinvestment in future innovation.


IV. Bypassing Traditional Limitations Under IRS Rules


  • Circumventing Percentage Limitations and Caps: Many conventional tax credit schemes limit the credit to a fraction of qualifying expenses or impose annual maximums. SMaRTi™, on the other hand, is engineered to bypass these hurdles through its deep integration with invoicing systems-infusing businesses to be healthier and happier.


  • Direct Regulatory Application: By embedding various iterations of the IRC and CFR into the system’s core, SMaRTi™ doesn’t wait for periodic reconciliations. It processes and applies the full value of each QRE as it is incurred. This integration ensures that even if the IRS code has historically set caps or percentage-based credits, the system leverages its direct, inline application to offer a full, immediate credit insofar as the regulations permit.


  • Liquidity Transformation: The immediate realization of tax credits means companies receive the financial benefit right away. Instead of having to calculate, aggregate, and then claim a deferred benefit from their annual return, companies see an instant reduction in their tax liability. This “direct pay” mechanism transforms what’s traditionally a long-term asset into liquid capital available for immediate use—facilitating ongoing research, operational expansions, or addressing cash flow needs.


In essence, SMaRTi™ reshapes the financial narrative for companies by ensuring that every dollar of QRE isn’t just accounted for;

it’s actively leveraged as an immediate reduction in tax burden, thus sidestepping conventional limitations and amplifying liquidity benefits under IRS rules creating an auditable trail for all embedded tax credits under the requirements of IRC 6001.