Unlike Enron’s technique of hiding liabilities in shell entities, some business owners simply overlook valuable assets that can be secured with very little effort in most cases.
These overlooked assets often come in the form of unclaimed tax refunds associated with various federal and state tax incentive programs. These programs range from:
- Research & Development Credits
- Federal and State Hiring Credits
-Eco/”Green” Tax Credits
- Sales and Use Tax Credits and Exemptions
- Property Tax Refunds/ Exemptions
Current business owners, or buyer’s of these businesses, can obtain a significant economic advantage by documenting these refunds and working them into there business plan, exit strategy, or factor them into their acquisition strategy.
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Tags: 2010 Tax Planning, 2010 Tax Rates, 2011 Tax Rates, Due Diligance, eco credits, Hiring Credits, M&A Tax Planning, Private Equity Firm Taxation, tax refunds
The formal accounting distinction between on and off-balance sheet items can be quite detailed and will depend to some degree on management judgments, but in general terms, an item should appear on the company’s balance sheet if it is an asset or liability that the company owns or is legally responsible for; uncertain assets or liabilities must also meet tests of being probable, measurable and meaningful.