Key Takeaways

1. Most routine dental activities do not qualify for R&D tax credits under IRS rules.
2. The IRS has repeatedly warned taxpayers about “R&D credit mills” promoting invalid claims.
3. Dentists risk audits, repayment, penalties, and interest if they file improper R&D claims.
4. Only true scientific or technological experimentation, not adopting new equipment, not CAD/CAM workflows, meets the legal standard.
5. Before claiming R&D credits, dentists should consult a qualified CPA to avoid becoming a target for IRS enforcement.

If you’re a dentist or dental practice manager, you may have recently seen messages with subject lines like:

• I just got a massive refund using this R&D credit service. You should try it too!
• We helped dozens of practices secure 5- and 6-figure refunds. Want yours?
• This is FREE MONEY for dentists. No risk! We only get paid if you get a refund.
• Why haven’t you filed your R&D claim yet? Practices like yours are cashing in.

This is happening nationwide. After the boom (and crackdown) surrounding Employee Retention Credit (ERC) mills, many of those same promoters have shifted to the federal Research & Development (R&D) credit, reviving an aggressive sales push last seen during the COVID-19 pandemic.

The pitch goes something like this: “You’re already doing research and development; you just don’t realize it!” The problem? It is rare for dental practices to qualify for R&D tax credits, and the IRS guidance makes it clear that routine clinical work does not meet the definition of qualified research. 

What the IRS Actually Requires: The Four-Part R&D Test

Under Internal Revenue Code §41 and related IRS regulations, an activity must satisfy all four parts of the statutory test to qualify:

1. The activity must be intended to develop or improve a business component (Permitted Purpose). The research must aim to create a new or improved product, process, technique, formula, invention, or software that enhances function, performance, reliability, or quality.
2. The activity must be undertaken to eliminate technical uncertainty. At the outset, there must be uncertainty about capability, method, or appropriate design, meaning you do not know whether or how you can achieve the intended result.
3. The activity must rely on principles of the hard sciences (Qualified Research). The research must be based on a field of physical or biological science, engineering, or computer science.
4. The activity must involve a process of experimentation. There must be a systematic process of evaluating one or more alternatives through modeling, simulation, trial and error, or other scientific methods to resolve the technical uncertainty.

Routine clinical dentistry does not meet these requirements. Under IRS guidance, placing implants, customizing orthodontic appliances, using CAD/CAM technology, refining workflows, and adopting new equipment are considered standard practice, not R&D.

Why Dentists Are Being Targeted

The IRS has warned taxpayers about aggressive promoters pushing improper R&D credit claims. Commonly used tactics include:

• Exaggerating what qualifies
• Charging large contingency fees
• Providing boilerplate reports not tailored to your practice
• Promising credits without understanding dental operations
• Relying on the IRS being backlogged

These firms are not taking the long-term risk; you are. And the IRS has already begun audits targeting small businesses that claimed credits without legitimate experimental activity. 

The Risks of Filing an Invalid R&D Claim

If you claim an R&D credit you’re not entitled to, the IRS may require you to:

• Repay the credit
• Pay penalties
• Pay interest
• Defend the claim in an examination or court

In many cases, taxpayers also bear the burden of providing contemporaneous documentation, something promoters often fail to advise clients about. These same firms rarely stand behind their work when the IRS challenges the claim. As a result, the financial risk sits squarely with you, not the credit mill.

How Dentists Can Protect Themselves

• Be skeptical of unsolicited messages or “free money” promises. If it sounds too good to be true, it usually is.
• Do not sign anything based on a promoter’s interpretation alone.
• Talk to your CPA before responding to any R&D credit offer.
• Only consider the credit if you genuinely performed scientific research.
• Ensure documentation exists before filing, not after.

When You Should Contact Us

If your practice is truly developing something new, not simply using or expanding upon existing technology, we are happy to evaluate whether it may qualify under the IRS four-part test.

But if a promoter tells you that:

• Routine dental work counts as R&D.
• Every CAD/CAM case is “experimental.”
• Every orthodontic appliance is a “new development.”

…that is a red flag. Our role is to keep your practice compliant and protected, not exposed.

Need Help or Have Questions About an R&D Offer?

Before you jump into any R&D tax credit program, contact us first. We will help you determine whether your activity qualifies and protect you from the growing number of credit mills targeting dentists in 2025. At Edwards & Associates, we specialize in tax and financial guidance for dental practices. We’re here to help you make smart, compliant decisions that protect your practice long-term.