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IRC Section 199 Deduction

Domestic Production Activities Deduction - IRC Section 199 Deduction
(a.k.a. DPAD, Domestic Manufacturing Deduction, and DMD)


The Section 199 Domestic Production Activities Deduction (DPAD)  provides permanent tax savings for taxpayers.  Our services are designed to cut through the complexities of the deduction and provide you with the answer to whether you qualify for the deduction and how much it may be worth to you.   Since the enactment of Section 199 in 2005, our tax professionals have worked closely with our clients across all industries to secure the maximum benefits allowed under the law.


Our Section 199 services include:

  • Qualification of Activities — We assess your production activities to identify what does and does not qualify as domestic production gross receipts. 
  • Documentation – We compile documentation of your business operations supporting a determination of qualified activities.   
  • Deduction Calculation – We identify domestic product gross receipts and non-domestic production gross receipts, allocate and apportion costs of goods and expenses to the relevant category of income to determine the Qualified Production Activity Income, quantify and assess the relevant limits, and compute the resulting Domestic Production Activities Deduction. 
  • Expense apportionment coordination with Section 861 Methods – We analyze costs and expenses to ensure that specific line items are allocated and apportioned in a manner consistent with the methods used for the foreign tax credit calculation. 
  • Form 8903 – We complete Form 8903 for Federal tax filings.
  • Audit Support –We assess and assist with product level data and calculation workpapers to ensure audit trails are properly identified and fully supported.  
Robert M.   Gordon
Robert M. Gordon
Managing Director
Tel. No:312-235-3321
Fax No:(312) 235-3371
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