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Declaration of Compliance

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The  Strategic Management and Research Technology infusion (SMaRTi™) system process, orchestrated by The Ford Enterprises Group, LLC (F-E-G) -  operating as a Research and Science, Fifth Party Logistics (5PL) provider under NAICS Code 541614 - is declared to comply and adhere to the legal framework established by  IRC Section 174,  IRC Section 6001, and  Public Law 95-507.


  • This process legally re-engineers the tax benefit structure by transforming what is inherently a deferred benefit into an immediate source of financial relief without violating the underlying tax code. In essence, SMaRTi does not bypass the law—it automates compliance and optimizes benefit timing within the legal framework provided by Section 174.


 The step-by-step analysis of the  SMaRTi™ process, aligns with these regulations as follows:


I. Compliance with IRC Section 174 (Research & Experimental Expenditures)


  • IRC Section 174 governs the treatment of research and experimental (R&E) expenditures, requiring businesses to capitalize and amortize such costs over five years (domestic) or fifteen years (foreign).

 

  • The SMaRTi™ process integrates this requirement into its daily operational invoicing system, ensuring that all qualifying expenses are properly classified. 


  • Automated Classification of Qualified Research Expenses (QREs):


  • The system identifies and categorizes expenses that meet the definition of R&E expenditures.


  • Expenses such as software development, prototype creation, and experimental processes are flagged for capitalization.


  • Bypassing Percentage Limitations:


  • Traditional tax systems impose percentage limitations on deductible R&E expenses.


  • The SMaRTi™ process bypasses these limitations by integrating multiple IRC iterations into the invoicing workflow, ensuring 100% dollar-for-dollar tax credit application.


  • Treatment of Software Development Costs:


  • IRC 174 explicitly states that software development costs must be treated as R&E expenditures.


  • The SMaRTi™ process ensures compliance by automatically categorizing software-related expenses under Section 174.


II. Compliance with IRC Section 6001 (Recordkeeping & Documentation)


  • IRC Section 6001 mandates that taxpayers maintain accurate records to substantiate deductions, credits, and other tax-related claims.

 

  • SMaRTi™ ensures strict compliance through automated documentation and audit trails.


  • Real-Time Expense Tracking:


  • Every transaction is recorded with metadata, including D-U-N-S numbers and invoice timestamps.


  • This ensures that all expenses are traceable and auditable.


  • Automated Compliance Checks:


  • The system cross-references expenses against IRC and CFR regulations.


  • Any non-compliant transactions are flagged for review.


  • Audit-Ready Documentation:


  • The SMaRTi™ process generates reports that align with IRS audit requirements.


  • Businesses using the system can provide instant substantiation for tax credits.


III. Compliance with Public Law 95-507 (Small Business & Federal Contracting)


  • Public Law 95-507 establishes requirements for small business subcontracting plans and federal procurement compliance.


  • The SMaRTi™ process integrates these mandates into its financial optimization framework.


  • Federal Contracting Compliance:


  • The system ensures that research expenditures align with government procurement standards.


  • Businesses using the process can qualify for federal R&D incentives.


  • Small Business Subcontracting Plans:


  • The SMaRTi™ process supports subcontracting compliance by tracking expenditures related to small business partnerships.


  • This ensures that businesses meet federal subcontracting requirements.


  • The F-E-G's SMaRTi™ process aligns closely with the objectives of the Inflation Reduction Act (IRA) of 2022, which is one of the most significant legislative efforts to combat climate change and promote clean energy in the United States.


  • The SMaRTi™ process, as deployed by Ford Enterprises Group, LLC, exemplifies a sophisticated integration of real-time compliance, automated recordkeeping, and strategic financial optimization.


  • By using advanced automation to identify and classify QREs in accordance with IRC Section 174, meticulously documenting every expense as required by IRC Section 6001, and aligning with federal contracting regulations mandated by Public Law 95-507, the system bypasses traditional limitations without ever breaching legal boundaries.