Incentive Claim Overstatements and Abuse Triggering Disallowances and Extra Scrutiny

$100,000-$300,000 in denied credits and audit fees when misclassified shared services (non-eligible as 'overhead') are disallowed; reputational cost if fraud implied • $100,000-$300,000 per production cycle in clawed-back credits; additional compliance audit fees ($10,000-$25,000); potential loss of incentive eligibility for future projects • $100,000-$500,000+ in lost tax credit value (compounded by investor cash flow impact); potential disputes with producers; loss of credit reduces equity value

Accountant manually cross-references invoices against handwritten classification rules; uses email conversations to justify non-standard allocations; stores receipts in multiple cloud folders without centralized proof-of-spend linking • Agency production coordinator uses manual spreadsheet to track client spend; costs bundled under vague categories (e.g., 'production services'); no real-time flagging of non-qualifying items (creative director time, agency overhead); discovered during client tax credit audit • Bond rep and production accountant maintain separate cost sheets by jurisdiction; rely on email confirmation from international partners about which vendor location and labor tier applied; currency conversions done manually; when tax credit audit occurs, production discovers that international post-production or vendor costs were deemed ineligible, reducing credit ceiling