5th Circ. Denies Cosmetic Co. Owners' R&D Wage Tax Credit

Law360, New York (January 24, 2014, 3:28 PM EST) -- The Fifth Circuit said Thursday that two highly paid owners of a cosmetic company could not deduct their salaries as a part of a research and development tax credit, agreeing with the U.S. Tax Court that the men presented no real evidence of their involvement in the company's product research.

In a unanimous opinion, judge Priscilla R. Owen said Farouk Systems Inc. owners Farouk Shami and John McCall claimed more than $25 million in R&D tax credits for their collective salaries from 2003 to 2005, but...
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