Tax Court Finds Reasonable Cause to Rely Upon alliantgroup Research Credit Advice (2/4/26)

Lew Taishoff has a rather cryptic review of George v. Commissioner, T. C. Memo. 2026-10 (2/3/26), TC 27494-16, here, at # 209 and GS here [to come]. See ALWAYS CHICKENS OUT (Taishoff Law 2/3/26), here. George involves the qualified research credit in §§ 46 and 174; the credit is arcane legally and usually fact-intensive, as the George opinion (86 pages) proves. Taishoff concludes that “Judge Tag Greaves has thoroughly reviewed the Section 41 landscape. It’s a must-read for specialists, and eyeglazing for the rest of us.” I am among the eyeglazing majority who may skim the opinion without digging into the details on the substantive issue. So, I will not deal with the merits of substantive tax issue.

I focus on the discussion of the § 6662 accuracy-related penalties (Slip Op. 81-85) which is a common subject for tax procedure enthusiasts. The Georges conceded some accuracy-related penalties (Slip Op. 2 n. 2 & 38 n. 21.) The accuracy-related penalties in issue were negligence and substantial understatement, both of which have an exception for “reasonable cause." The Court finds that the Georges had reasonably cause in relying on alliantgroup a major provider for research credit advice. See alliantgroup website here. The Court describes alliantgroup (Slip Op. 83):

Petitioners sought the advice of alliantgroup to determine whether any activities performed by GOMI qualified for research credits and if so, the amounts of such credits. At the time George’s contracted for the research study, alliantgroup had over 12 years of experience in conducting tax credit and incentive studies for clients. Its ranks are filled with people who are knowledgeable on the intricacies of the tax code, including tax attorneys and those with tax policy experience. One such person was Mr. Troutman. He had a long history at alliantgroup and specialized in research credit studies for the agriculture industry. He also was an attorney who went through extensive internal training at alliantgroup to stay on top of the latest developments in the area.

            The reputation of alliantgroup was also bolstered by Frost PLLC's recommendation. As Gary testified, Frost PLLC grew alongside George's and had a tremendous amount of knowledge about George's business operations. When Frost PLLC called regarding a possible collaboration with alliantgroup, it was reasonable for Gary to conclude that alliantgroup was competent in its field. alliantgroup had the necessary expertise to competently advise petitioners.

alliantgroup diligently requested and reviewed documents and met with employees to determine GOMI's eligibility for the research credits. Although petitioners did not directly provide alliantgroup with records, George's, the entity with the relevant documents, provided alliantgroup with open access to George's books and records and the plethora of data routinely gathered throughout the standard production process. George's used these documents for business purposes, including to determine grower compensation and to perform trend monitoring, so there is no reason to doubt the accuracy of the information contained therein. alliantgroup also had access to employees from the C-suite down to the field service technicians for interviews. Finally, alliantgroup worked closely with Frost PLLC, which provided additional documents, verified facts, and answered any lingering questions.

 The Court finds, on the facts (Slip Op. 85): 

Petitioners relied in good faith on alliantgroup’s advice. alliantgroup’s analysis of GOMI’s qualification for the research credit was extensive. The research credit study took place over three years. The reports were extensive and provided an in-depth review of the activities performed by GOMI and the calculations for the credits. When presented with such thorough analysis, it is reasonable to conclude that petitioners relied in good faith on alliantgroup.

JAT Comments:

1. Alliantgroup features prominently in some research credit cases in the Tax Court. E.g., I searched on “alliantgroup & research & credit” in Google Scholar’s Tax Court cases. The results are here. I have not analyzed those cases to determine alliantgroup’s role or the Court’s view of its role. It is merely to say that alliantgroup is a prominent player in the research credit advisory market. However, I did prompt MS CoPilot to respond to “is alliantgroup legit.” The response:

Bottom Line

alliantgroup is legitimate but controversial. It is a real, established tax consulting firm — not a scam — yet its aggressive credit‑claiming strategies have drawn criticism and triggered an IRS Criminal Investigation raid. If you engage them, do so with careful oversight from your own CPA or tax attorney.

If you want, I can also summarize the IRS raid, compare alliantgroup to other tax‑credit firms, or help you evaluate whether your business qualifies for R&D or ERC credits safely.

In George, the Court was influenced by the involvement of long-time CPA firm, Frost PLLC, here.

Caveat: I make no judgment on alliantgroup. However, from my earlier readings of opinions and other materials (including news events of the IRS raid), I do think that alliantgroup is legitimate and controversial.

2. The Court also offered this footnote that readers may find of interest (Slip Op. 85):

33 Respondent also contends that he is entitled to a presumption that testimony from a representative of Frost PLLC would have been unfavorable to petitioners because they could have called a Frost PLLC representative to testify but chose not to. See Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165 (1946), aff’d, 162 F.2d 513 (10th Cir. 1947). Even if we did apply such a presumption, we would still find that the weight of the evidence favors petitioners. See Diaz v. Commissioner, 58 T.C. 560, 564 (1972) (observing that the process of distilling truth from the testimony of witnesses, whose demeanor we observe and whose credibility we evaluate, “is the daily grist of judicial life”).

3. Finally, an issue perhaps only for grammarians or some such, the Court adopts the convention of not capitalizing the A in alliantgroup when alliantgroup is the first word in a sentence (e.g., Slip Op. 35). It nevertheless quotes an earlier case footnote where the Court capitalized the A. (Slip Op. 85 quoting Betz v. Commissioner, T.C. Memo. 2023-84, at *113 n. 53.). CoPilot offers the following:

If the business name alliantgroup appears as the first word in a sentence, should the first letter be capitalized?

Yes — you should capitalize it.

Even though alliantgroup styles its name in all lowercase as a branding choice, standard English capitalization rules still apply in running text. When a sentence begins with a proper noun, the first letter is capitalized regardless of the company’s preferred stylization.

So at the start of a sentence, you would write:

• Alliantgroup was audited by the IRS…

Within a sentence, you can choose either:

• alliantgroup (respecting the company’s branding), or
• Alliantgroup (following conventional capitalization of proper nouns).

Most formal writing defaults to Alliantgroup everywhere for consistency, but at the beginning of a sentence, capitalization is mandatory.