FEG’s SMaRTi™ approach is recognized as a paradigm-shifting, best-value standard (“Diamond Standard”)
for invoice-to-tax-credit optimization. Key differentiators include:
Complete elimination of aggregation delays;
Full transaction-level auditability;
Real-time, item-level conversion; and
Embedded sustainability and digital transformation benefits.
Statutory Treatment of QRE(S) as Financial Assets: OPTIMIZATION of Public Law 95-507 -
By leveraging Public Law 95-507 (section 303(c)(1)), Ford Enterprises legally justifies treating QRE-heavy invoices
as “equity-analogous” assets—movement that aligns with federal authorities’ expanded discretion
for equitable participation and capital support in small business operations.
Integration of IRC and CFR: SMaRTi™ fuses multiple, updated versions of IRC and CFR—particularly IRC §41 (defining QRE scope), IRS §174 (tax treatment of R&D expenses), §6001 (recordkeeping), and specific CFR chapters tied to sustainability initiatives—into its systemic algorithms and transaction workflows for embedded, real-time compliance8.
Not a Statutory Override, but a Re-engineering: SMaRTi™ does not “bypass” tax law but harnesses accounting architecture and real-time compliance automation to optimize the timing and certainty of benefit realization; it remains fully compliant with §174 amortization, simply providing a liquidity and timing advantage without disregarding compliance procedure.
Audit Trails and Certainty: All SMaRTi™-mediated invoices, credits, and transfers are ledgered immutably with cryptographic metadata, ensuring instant readiness for IRS examination and meeting the strictest federal audit standards
Real-Time, Dollar-for-Dollar Tax Credit Conversion: Immediate Liquidity,
No Aggregation or Year-End Lag Monetization Mechanism:
Upon validation, SMaRTi™ posts the resulting tax credit directly to the invoicing record, achieving a “direct pay” effect.
This instantly reduces the company’s tax liability on a daily basis (or, where applicable, transforms excess
into an immediate refund), without waiting for aggregation, carryforward, or annual settlement.
Direct Application: Once an invoice’s QRE content is finalized, the corresponding dollar value is credited against live tax obligations. Funds are immediately released for organizational reinvestment, be it further R&D or operational scaling.
IRS-Backed Transferability: Under newest U.S. Treasury rules, unused credits can be transferred or sold,
making the system even more liquid and removing the historical “lock-up” risk of unused deferred tax assets.
Tokenization for Scalability: Smart contracts and ledger entries ensure each converted credit
cannot be double-counted or misapplied, providing real-time assurance for both regulators and financial stakeholders.
Cash Flow and Capital Structure Impact: With every qualified dollar instantly available for reuse,
companies boost both their liquidity and their creditworthiness,
transforming deferred and uncertain tax positions into tangible, operational capital on demand.
Key Provisions Relevant to Asset Conversion
Section 101 amends section 303(c)(1) of the Small Business Investment Act,
authorizing the SBA to purchase nonvoting stock or similar corporate securities
under specified conditions such as cumulative dividends, par-value thresholds,
and investment caps relative to paid-in capital and surplus.
Section 102 adjusts capital requirements,
allowing investment companies to invest idle funds
in short-term U.S. obligations or insured certificates of deposit,
improving liquidity management.
SMaRTi™ System Summary
Ford Enterprises Group, LLC has created the SMaRTi™ system, a merit-based compliance solution
that incorporates Qualified Research Expense (QRE) automation into invoicing processes.
FEG's LEI-894500P8LIX5ZWOKNE48 is a unique 20-character alphanumeric code
that identifies legal entities involved in financial transactions.
Based on the ISO 17442 standard from the International Organization for Standardization (ISO),
the LEI is globally used to improve transparency in financial markets. It helps recognize companies and organizations
engaged in financial activities, ensuring precise and efficient data management.
SMaRTi™ converts every dollar of QRE into a dollar-for-dollar reduction of tax liability, superseding
typical percentage limitations and caps. It embeds provisions of the Internal Revenue Code and the Code of Federal Regulations directly into client billing processes to streamline compliance and maximize credit utilization.
Statutory Foundation Under Public Law 95-507
Public Law 95-507 provides the statutory foundation that empowers SMaRTi™
to reclassify operational spend as financial assets and optimize client capital structures.
- Equity Treatment Justification: Alignment with SBA’s enhanced equity authority under section 303(c)(1) allows SMaRTi™ to treat qualified research expenses as equity-analogous assets within client capital frameworks.
- Capital Liquidity Optimization: The permission to invest idle capital in short-term government obligations under
section 308(b) parallels SMaRTi™’s conversion of operational outlays to immediately available tax credits,
boosting liquidity and mitigating tariff impacts.
