Cherrytree Group Blog

Why can’t a general-practice CPA or attorney represent a developer in acquiring tax credits?

[fa icon="calendar"] Mar 6, 2017 9:00:00 PM / by Warren Kirshenbaum

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Most consultants have at least one story of being told — explicitly or implicitly — that the work they do doesn't require special knowledge and that their functions could be handled just as easily by other professionals — or by any smart business person.

We disagree.

When working with clients pursuing commercial incentives — particularly tax credits —the value that professionals such as the team at Cherrytree provides comes from:

• an innate knowledge of the tax credit landscape

• deep experience working with state and federal regulators

• an ability to obtain approvals for eligible expenses which other professionals cannot achieve

 

Cherrytree’s fees are success-based; therefore we traditionally only work on deals that we believe will be successful. If there are no awarded incentives…well, we are not paid anything.

Our knowledge of the thinking, tendencies and motivations of state and Federal regulators has been gained over time from much interaction and experience with these agencies. State and Federal bureaucrats are unique in their interactional capacity, and the manner in which we deal with them has been refined over many years.

Real estate development incentives — such as commercial state and federal tax credits — are our sole focus at Cherrytree and we have acquired intricate knowledge of the programs, their operational functionality, and the details of eligibility. This allows us to more adequately argue potential denials with the regulators and to provide persuasive arguments for approval.

While it may seem a filing requires only a simple form, that belies the complicated process involved — often made more difficult, time consuming and challenging by the bureaucracy of the regulators. If you don't speak their language it’s similar to trying to defend yourself in court. Prosecutors and opposing counsel love it if you appear without a competent attorney.

Professionals such as CPAs or tax lawyers — who indeed have expertise in tax matters — are not best served to act as consultants for tax credit filings, as there are usually specifics that require detailed knowledge that falls outside their purview. What’s needed is an expert to analyze, translate, and fully understand environmental reports, construction documents, architectural aspects, and specific real estate-centric solutions.

As we at Cherrytree possess all these capabilities, as well as the tax and financial knowledge, we find we play an invaluable role to the business owner or property owner/developer. Similarly, we have found that when we work hand-in-hand with CPAs and lawyers the results are usually even better for the client — which serves all of our interests in the long run.

 

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Topics: Tax credits

Warren Kirshenbaum

Written by Warren Kirshenbaum

Warren is the President and CEO of the Cherrytree Group, a tax credit consulting, brokerage, and syndication firm.

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