Statistical sampling is a methodology for estimating amounts that are not easily quantifiable due to the volume of data required to evaluate and calculate an accurate result. Without statistical sampling, a full review of all transactions would be needed. In tax, the IRS accepts and prefers a statistical sampling methodology when dealing with a vast amount of data. In regards to the R&D Tax Credit, this approach is important since large amounts of a company's records are necessary to substantiate and support a credit. However, the use of statistical sampling requires only a portion of these documents to be kept for potential IRS review purposes. This means that for many large businesses, statistical sampling may be necessary to support their R&D Tax Credit claims. Our team is proficient in utilizing statistical sampling techniques in R&D Tax Credit studies, allowing the credit to be claimed with confidence while reducing the amount of time company's subject matter experts spend with consultants.
In addition to R&D Tax Credit studies, the IRS allows for sampling in a number of different areas including but not limited to meals and entertainment, fixed assets, and transaction cost analysis.
Outside of tax, statistical sampling is used in marketing surveys, polling, quality assurance, and many applications depending on the industry.