 Hello, and welcome back to the Think Tech Hawaii Studios. Andrew Lening here, your host with Security Matters, Hawaii. We're going to have an interesting episode today. We've got Raheem Wajian. Thank you, sir, for the line of group. Thank you for having me. This is one of those guys I had to go bother during his vacation. I got him in here off the beach because this is a super important topic. These guys specialize in the R&D tax credit. And we'll discuss some of what that is, but first of all, once you kind of gets in a little bit, Wajib, because his focus for their firm is the kind of fun that all of us want to have, I think. And he's very good at it. So thanks for coming in. I really appreciate you being here today. Thank you for having me. Give us a little bit on a line group and then a little bit about sort of your history and then how you evolved into your role there. Sure. So we're a national tax advisory firm that specializes primarily in R&D tax credits, but we have many other service lines that we work with. The R&D tax credit has been an amazing opportunity for us to work with companies, help them reinvest in their own firms, help American businesses continue to grow and innovate and stay competitive in the global marketplace. So it's been an exciting trip for me, started as an entry-level consultant. I had a legal background before that, worked as an attorney. Saw this as a great opportunity for me to leverage my work in government compliance and regulatory compliance into sort of a different field. I had a science background myself as well, so this was very, very appealing for me. Went through this process and solely over the last five years grew into a full-fledged consultant, led a team of consultants to help companies from agriculture all the way to security, all the way to zoos and animal husbandry and veterinary school. I mean, it's all over the place and it spans the spectrum of companies and I'd love to talk about that. And now I'm working more on training and development of the consultants and how to make sure that they're taking all these industry-specific backgrounds. We have engineers, PhDs, all these different types of folks who bring all these great skill sets and can really talk to these companies about what they're doing and how to get these benefits. I'm excited to help teach the next generation of folks as they're coming through to be better consultants, to be better partners with these companies and help them grow. Interesting. Yeah, I think that, and I should let our industry partners know that if you're in the security business, which is why we're on this channel, you need to talk to these folks because you qualify. A lot of your work qualifies and you probably don't know. So let's start with that. We had an event recently in Houston that was hosted and I was absolutely floored by the level of enthusiasm and then the breadth of experience across the different groups there. You go through the building, they introduce us to, I don't even know how many other working groups. I presume all of them, but you meet all these brilliant people. They're fairly young, which is coming into your charge to get them on boarded. But the way that they work together, because as you said, you were able to approach firms and help firms from A to Z. So talk a little bit about that culture, first of all, and then what it's like to have all that diversity of knowledge at your, it's like a walking encyclopedia in the building. It is. And that's got to be a lot of fun. It is. The energy is electric. The passion that people have is unmatched in any of the firms that I've worked out before. I say that. I agree. And I think one of the hallmarks of what we've been able to do and the reason we're successful is, as you mentioned, the culture. And so it starts from the top. I mean, all the way from our CEO, DeVall, through senior management, down to the folks leading the teams and in our even day-to-day training conversations and development discussions, we're all about the culture. We have a raving fan mission. It is all about the client experience to make sure that they see value in what we do and they see what the benefit is for them. And our goal at the end of the day is to make sure that every client, when they have walked through our services and understand the benefit, they truly are a raving fan, right? There are those fans out in the cold, shirtless, painted up in 20-degree weather, screaming and cheering. Got the inline group. Exactly. A little blue. Nice. A little blue ages right up. But they are excited. They want to tell others about what the opportunity is. They want to help their industry partners to make sure that they can do that. So I think that culture has really helped us to not only build the company that we are today, but also make such great partnerships with our clients. And let's talk about some of those. You started agging up through zoology. Walk us through some of the experiences that you've had. I guess I wasn't surprised because in an industry like ours, some of the work we do that qualify, which we didn't even know did, you folks found that for us. I can imagine there's a lot of industries out there that don't think that they would qualify for something called R&D. And maybe it's just the words that they don't apply to what they do. But talk about that innovation and the way you find companies innovating and maybe whatever stores you can share. Absolutely. So there's a lot of different areas that R&D applies to, as you mentioned. And you're absolutely right that a lot of people don't recognize what R&D means in the tax space as it applies to maybe more, they think about pharmaceutical research, they think about medical research. Sure. I think it's pretty easy to think about those innovations, new drugs to cure cancer, things like that. But there's day-to-day R&D going on every single day, whether it's an agricultural company that's trying to figure out how to improve the soil for their crops, or how to better harvest, or how to better identify potential products or harvest products that aren't ready and need to be sorted out. So whether it's the machinery that goes into sorting it, whether it's the satellite navigation that helps guide the combines through the actual fields, whether it's other areas of software that help to evaluate and identify other efficiencies. I mean, that's just agriculture. You think that in the technology space, as we've already talked about with security or any other type of integration, it becomes even more difficult, right? How do you take all these different pieces of equipment? How do they work together? How do they talk to each other? They're not from the same background, they're not from the same manufacturer. All these different parts and pieces have to talk, they have to work, they have to sync. Those types of things are very, very difficult, but there's innovation going on every single day to make that happen. So that's, I think, some of the breadth that you'll see. It seems like that to me, the entrepreneurial mind, here's this. It goes, I need to start 50 companies and leverage this R&D tax credit, you know? Because it paves the way for innovation. That was its intent. Yes. The goal of the R&D tax credit was to originally help American businesses stay more competitive in the global marketplace. There you go. That was the reason it was there, right? So back in the 80s, and you'll hear our CEO talk about this a lot, back in the 80s, it was all about auto-manufacturing, right? Oh, isn't that old? So it started back in the 80s. I didn't know, I wasn't aware of it. The original inception of it was back in the 80s to compete with auto manufacturing. Okay. Then we moved forward into the technology space in the 90s, right? Silicon Valley and all these things. And now we're here in the 2000s and beyond, right? We're almost at 2019. It's amazing, but you're starting to see the big player in this space and what's changing in the world really is the software and technology background. So it's been evolving little by little. There's been changes in the law that happen, but that's really where it started is to keep the American businesses competitive. And we got a briefing. There were half a dozen congressmen in the room. Yes. I know I think some of your board members are ex, they had directors of IRS offices and things like that. So a lot of experience around this. And I suppose you say it's changed. So there's been expansions from the original. Right. And do those occur because the government can figure out what's needed or have you folks helped drive that conversation? I would love to say that the government's been able to do it on their own, but I think they've recognized the success you can have with partnership. And so we have a policy division, right? We Align National. We have a branch or division of our company that's not just dedicated to policy, but helps focus on international issues, helps focus on more global and more domestic larger matters that are happening day to day. So the expansions that have happened, I'm proud to say that we've been a part of those. That's awesome. We've been there to give guidance. We've been there to give our input. We've run a significant number of studies. We've run over 20,000 different R&D studies for different companies to help put over 100,000 jobs back into the marketplace. So we've got a little bit of experience doing this. I think so. But it's fun to guide them, give them the benefit of our experience and help to expand the legislation in a way that's going to help the most businesses possible to keep the American businesses growing. Are there legal boundaries that have to, I mean, you don't just get the legislation to rewrite things. So do you have to go sort of prove these and these use cases in court, for example, or maybe justify a credit or something like that? Is that sort of how the law or how the expansion occurs? Great question. I think one of the things that does happen on the Hill is there's constantly discussions going on about what's taking place across the country. There's constantly working groups and different committees that meet and talk about the various issues that are happening across the country. And so obviously financial security, obviously the actual growth of the American taxpayers and businesses, which are the backbone, that's obviously a big topic. And within that, as different countries around the world start to become more competitive, start to have their areas of specialty, we are always, as a government, looking for different ways to improve ourselves. And so we happen to be part of members of some of these committees and are able to give some of the guidance and things like that. Or we've been consultants for them in the past where they come to us and leverage our industry expertise within the tax base and say, hey, here's something that we're considering as a working group. What are some of the thoughts that you have? What's the data that you're seeing? And how can we leverage that to make sure that those American taxpayers are also getting taken care of? Wow. I know that the report we see was really thorough. Is that a typical white paper? Because we're a fairly small firm. So is a typical white paper 60-page document? Are they books? I mean, some of this seems quite complex. And the explanation piece and the justification pieces are not thin. This is not your average bedtime story reading. So there's a lot of legalese and jargon in there. Is it, I guess give us some examples of some more complex ones? Or does it come out as the report like this? Sure. How's it come out? It can. The beautiful part is our process, while we have an infrastructure in place, is built to be customized to each client. Sure. So that being said, yes, there is a level of support and substantiation that we have to provide and do for this particular analysis. That being said, it is something that you shouldn't try at home, so to speak. No. But what we've done very well is we look at the businesses, we conduct the analysis, we have the experience with the legal side of things. And so a report can be 60 pages or so. It can be hundreds of pages and five, 10, 15 books, depending on the size of the credit, the types of the expenditures involved, the entity organization and structure itself. All of these different moving parts come into play and have to be taken into consideration when we're doing this analysis. Because if one of those factors is not taken into consideration, it could swing the benefit and actually drop the benefit, or there could be cost left on the table. And that's why with the laws, it changes every year and there's updates made or tweaks made at different state levels. We pride ourselves on making sure that we're on top of those things, in front of those things, and able to give the best guidance to our clients so that they get the maximum benefit that they're allowed to go hire more people, buy more equipment, open another office, all of the amazing things that are going to be really, really, really helpful for their business to keep growing. Yeah, at the recent conference, we had a room that was primarily targeted at CPAs. I think some other clients like us were there as well to sort of learn the process. So that partnership, because this is not something that most CPA firms undertake, it's so specialized that they just don't have that expertise in-house. So they partner with you, and there was hundreds there in the room. That seems to be a good mechanism. I mean, if I were a CPA, I would much rather, I guess the word sort of lay that off so I know my clients are getting that great level of service in an area that I don't have the expertise, rather than just leave it alone. Don't worry about the R&D tax credit. We don't do that, you don't need it. No, and that's a great, great point. We partner with CPA firms, we partner with industry associations, we have clients, right? We love to have people come visit our offices and see what we're all about, but I think one of the great things is that those CPAs are more like generalists, right? General practitioners, you go to your doctor, they take a look at things from a very holistic standpoint, but then if there's an issue, you go to an ENT, you go to a gastroenterologist, you go to these very, very specialized folks who really, really know what to do and how to handle certain things, and that's where I think our CPA partners, our industry partners, see us as an ally for them and say, hey, look, we can help you identify particular clients that might be able to take this credit. Like, can you help them, can you conduct an initial analysis, see what the potential benefits are? And you mentioned that report, right? So there's three phases to our process. We conduct an estimate in the first phase. What's the potential value? The second phase is really the sort of the meat and potatoes of the analysis, and the third page is all the supporting information that goes into it, and then we have deliverables along the way, but it's all meant to take into that business's perspective the holistic analysis, and we are that specialist that come in and analyze the R&D tax credit. Yeah, let me tell you, this is a process that you might be surprised. You can get engaged in the initial analysis at no charge, shall we say? Right, our phase one is we want to bring clients in to take a look at and see what the potential values are. If it's something that's not significant for them, or it's not a viable benefit for them, we appreciate their time, hopefully they appreciate ours, and there's no issues there. Okay, so we're going to pay a few bills. I think we'll be back in about 60 seconds and talk a little bit more about the federal R&D tax credit. Aloha, I'm Wendy Lo, and I'm coming to you every other Tuesday at two o'clock live from Think Tech Hawaii, and on our show, we talk about taking your health back, and what does that mean? It means mind, body, and soul. Anything you can do that makes your body healthier and happier is what we're going to be talking about, whether it's spiritual health, mental health, fascia health, beautiful smile health, whatever it means. Let's take healthy back. Aloha. Hey, Stan the Energyman here on Think Tech Hawaii, and they won't let me do political commentary, so I'm stuck doing energy stuff, but I really like energy stuff, so I'm going to keep on doing it. So join me every Friday on Stan the Energyman at lunchtime, at noon, on my lunch hour. We're going to talk about everything energy, especially if it begins with the word hydrogen. We're going to definitely be talking about it. We'll talk about how we can make Hawaii cleaner, how we can make the world a better place, just basically save the planet. Even Miss America can't even talk about stuff like that anymore. We got it nailed down here, so we'll see you on Friday at noon with Stan the Energyman. Aloha. Hey, welcome back to the Think Tech Hawaii studios for this episode of Security Matters Hawaii. Raheem Wajee and myself are actually I'm getting educated about the R&D tax credit with the rest of you today. I'm just ad-living over here, so thank you so much. We are learning that this is broadly applied. Yes. Almost every business should ask, does it apply to me? Yes. Ask the question, get some preliminary analysis. Found it if you qualify, and ask a specialist. You're, I don't want to, I'm not beating up CPA firms, but they might, because they don't understand, they might just say, I don't bother with it. To them it looks maybe risky because they don't know. Ask a specialist like a lion group about the R&D tax credit. You really want to talk to someone that does this day in, day out. This is all that they do. So I think it's an important thing to stress that, you know, some, I think the financial service industry is typically what I would call conservative. Typically. Let me say that. So I don't think I'm on a limb there. Okay, good. So you know, so that, you know, a response of, hey, could, could we take advantage of the R&D tax credit? A typical response might be, nah, it's, it's really complex. You don't want to risk it. Right. Risk is that, that thing. So from, from a, you know, a CPA firm who doesn't know, but if you talk to you folks, the typical response is. You probably qualify. What do you do? Exactly. Right. You know, how can we, can we take a look at your industry? Sure. Can we spend some time? And, and look, you know, the, the CPAs that are out there, they have their specialties, right? That's what I think. Their job is to, to handle the books, to be partners. And, and to be honest, the reason we've been so successful is through those partnerships, right? They, they have built a trusted relationship with us and said, hey, we have five clients that we really think can benefit from this. We really want your helpful line group to make sure that these clients are taken care of. Awesome. But like you said, they are, this is a complex matter. It's a complex analysis. There's a lot of moving parts. We actually partnered well with the CPAs because they understand the company structure. They understand a little bit more about the financials. They are an ally for us. They help us gather information. They help give us certain input and feedback and, and information that we need to conduct the analysis. But you're right. They come in and say, look, we're going to hand this off to the specialist. Let them take care of it. We're here to give our advice and work together with them, just like a surgery. We will get it done together and make sure that they're taken care of. Yeah. And so the, the flip side of that is if you ask your CPA and he goes, oh yeah, I'll take care of it for you. And he asked him, has he ever done it before? Like, get some clarification on this. Nothing, nothing on the CPA. Sure. But they could be a protective of their space and protective of that kind of relationship or whatever. So if they're not maybe used to partnerships like this with other types of specialists. In fact, are there other areas of tax code specialties, specialties that, that firms do? Like, you know, you guys already tax credit and there's another one of 199b or D or whatever. But are there, is there something else like a, I don't know, is there a transportation tax credit or something? I don't know. Are there other areas like that that firms specialize in? There are lots of other areas so some of the larger firms primarily focus on the normal day to day accounting. They focus on audits, things like that. There are other areas, 179 cap D is another big area that other firms do sometimes. Again, it's another specialty of ours. I see. There's a lot of export things that other firms might work on. I didn't think about exports. Again, so there are a lot of things. But I mean, even with our firm, we have everything from propane tax credits for forklifts to hiring credits for for veterans and other other accommodations. So there's a lot of different moving parts out there. And look, the government doesn't do a great job of advertising, right? You don't see a lot of these tax credits getting put on commercials. You don't see a lot of that, right? Well, I mean, they have just spending the budget on if you keep it, they don't get the money. I mean, but for them, they actually, if you talk to the leaders on on any side, there's bipartisan support for this credit. And so they want, they want American businesses to claim this credit, but they just, they don't advertise it like you would a product or a service. Makes sense. We take that responsibility very, very seriously to make sure that we educate and make businesses aware, industry partners aware, CPA firms aware of what's out there, at least from the services that we offer. And there's many, many, many more out there that people need to start using more often as well. Sounds like it is. So is is the expansion of this particular tax credit is annual? Is it every few years or is every year has it kind of gotten broader as our areas that have been narrowed? Or how does it, you know, how does it work? And, you know, you've been at it a while. Yeah. So I've been at this for a while. Originally, the R&D credit would be renewed by annuals, so every two years. I see. Okay. Recently, it just became permanent about a couple of years ago. And so now it is something that businesses can rely on. They know it's going to be there. There's no questions about is this going to be gone in a couple of years or not. It's permanent. That being said, there are always changes happening in the nuances of the law, right? So there are certain types of companies that can claim it. There are certain expenditures that can be claimed now or cannot be claimed now. Those types of evolutions are always happening. And that's where we have a team of folks that are constantly responsible for making sure that they stay in front of those things. But yeah, it can vary depending on what you're looking at. Wow. Is the, is the permanence now? So does that, are there, I'm going to say five phrases, right? So are there companies that are intending to get the credit to help leverage some of the growth or some of their innovative work that they do? So knowing that it's permanent allows them to sort of free up that effort. Exactly. Without thinking, oh, I can, I got to check back in two years where you pull that spend in or that R&D spend I see. And a lot of companies, what we try to encourage companies to do is not to focus on the analysis or what they're doing purely for the R&D tax credit. Right. Because it's not like get all your money back. Exactly, right? Number one, you don't get all of it. But number two, you don't want to bank your entire business on justice credit, right? What we do is we're sort of an add-on service. We help companies who are continuously trying to grow who are investing this money in their business to innovate, to grow, to expand and do these things. We help identify those benefits and then let's say you get a 25 or $50,000 benefit or $100,000 benefit and you continuously are growing and expanding and doing those things. Then as business, you can start to say, hey, I'm going to get $50,000 to $100,000 every year as long as I continue to innovate and do these things because there's no big changes. Now that becomes part of your budget. I can reinvest this $100,000 into more jobs or I can get more equipment. And that's where the fun of it comes in for the business owners is now it becomes this tool. I'm getting rewarded for the innovation I'm doing. I'm getting rewarded for hiring people who have STEM backgrounds and are trying to help innovate and do these things. That's really what the beauty of it is. And so I'm just back just to the original idea. That's what government wanted us to do. So if you're in business and you're not looking at this, you're not really performing in the way the government set you up to perform. And why would you ignore that opportunity? I mean, you know, get some analysis done. I mean, we didn't know. So we were there. I mean, we were able to go back several years. If you get engaged in the process, you got to look back a few years. Now you do need good documentation of your processes. There's a lot of... It's not vaporware. Like, there's a lot of documentation. But how far back could a company go with its... Great question. So a company can go back approximately three years, give or take, depending on the statute of limitations. So there is sort of a statute that governs how far back you can go and amend a tax return. There's caveats there, too. You can sometimes go back beyond three years. Some states have four years. So there's a lot of nuances. Again, that's where I think our expertise comes into place because we have all those down pat. But generally, you can go back and look at three years of analysis backwards and then continue to look at it something going forward. And the credit itself carries back a year and then carries forward up to 20 years, which is... Universal companies can say, okay, maybe my tax liability wasn't significant this year, but I had a lot of spend on innovation. I want to take that. I'm going to be out of the $100,000. I can only use $25,000 this year. I see. But that $75,000 will carry forward. And I can already start planning to offset my tax from next year. Or there's other ways to offset employee payroll tax. And all these different things that our companies are eligible for and the government wants companies to take advantage of. Yeah, so this is how you grow. Obviously, you don't have the money guy here. My audience knows, my boss, my wife runs the money. So, you know, this for me is always like, my entrepreneurial brain is going, wow. For us, I know that the money that we got back went directly into some training. Exactly. And a lot of training. So it's super important in our industry to help bring our lower staff up. And so that training expense comes out of pocket. But if it's coming back because we're innovating on the projects, then it's sort of probably paying for itself and also paying for future innovation and perhaps future tax savings. Exactly. As you grow that younger generation and they get invested in and there's training and they continue to elevate, then that next level up can move up and start handling some of these larger projects and more innovation, more complex, more challenging. And now you're building this company that is growing and handling all of these amazing projects and you're becoming more well known. These junior folks are growing and using their backgrounds and innovating and being part of that culture that you're creating at your firm. Yeah, this is something... Let's talk a little bit about awareness. We came across you at a professional trade show from our industry. I met Missy at the time and they had been around our industry a little bit. I think they had already had some success with some firms from our industry. And so we just checked it out with some of those guys. They're like, oh, hey, you got to try it out. It's great. And so we did. How do you build awareness? You may be in all the markets that are already there. I don't know. You guys have quite a bit of breadth now. But what does an awareness campaign look like? How do you get out there and canvas the community and you don't know what you do? Multiple different ways. So originally our big, big focus and push and our huge partners were the CPA firms. There's a lot of trust with those relationships. There's a lot of businesses that go to their CPA firms for guidance and all these other things. And so they saw a mutual beneficial partnership with us to be able to help support their clients and continue to help them grow. So that was the first one. We also approached industry association. So whether it's trade shows, whether it's local programs that are happening, supporting local charitable activities, whether it's anything from leukemia to STEM focused scholarships, that's kind of the way we make sure that people understand how important this is to our community, to give back to our community, but also help cultivate these, these focuses on STEM and science and things like that. And then so you have CPA firms, industry trade shows, and then of course, that raving fan mission. So what we do, what we've been very, very fortunate is that our clients do seek us out, provide us as a recommendation to others and go and push those things. So I think we're hitting the educational side all the way from the youth, all the way up through college and beyond. We're hitting the CPA firms to make sure that they see us as a valuable ally for them. Industry partnerships are all over the place. And then of course our direct clients who have become great, great fans of ours and want to help other partners who are there to continue to grow as well. Yep, I'm a raving fan. IST is a raving fan. I appreciate it. Big Tech Hawaii is a raving fan. Go check out this tax credit, call a line group, get a specialist. You probably qualify and you should probably get engaged and be a better company. Thank you so much for watching today because security matters. Aloha.