Neotax

Neo.Tax is a tax automation company whose software applies artificial intelligence to business tax compliance, beginning with the U.S. federal R&D tax credit under IRC §41. The platform ingests data from systems companies already use — Jira, Linear, GitHub, Confluence, payroll and HR systems such as Workday and ADP, general ledgers and ERP systems such as Oracle NetSuite, and cloud providers such as Azure — and analyzes more than 20 passive signals to determine which engineering projects and expenditures qualify, without surveys, interviews or manual time tagging.

Six AI agents (Project Creator, IRS Qualification, Quantifier, QRE Calculator, Project Narrative and QRE Defender), described as trained on IRS code, regulations and case law, run continuously over customer data. Outputs include an audit-ready R&D tax credit study with Form 6765 figures, software capitalization treatment under ASC 350-40, and R&D capitalization under §174, with each figure traceable to its source system. The company also positions the product as removing FIN 48 and return-to-provision (RTP) work for tax departments.

An earlier generation of the product targeted startups and small businesses: it allowed a company to prepare an R&D credit claim in roughly 10–30 minutes by connecting payroll and accounting data, with a final review by a former IRS agent before submission. At that stage Neo.Tax described its first product as putting up to $250,000 back into each company's pocket, and marketing materials cited average customer savings of over $50,000 and potential recoveries of up to $10 million for qualifying companies.

Founding story

Press materials describe a founding team combining a Stanford PhD in machine learning (Firas Abuzaid, CTO) automating the expertise of a former IRS agent (Stephen Yarbrough, Chief Tax Officer), with productization by a former Intuit product manager (Ibrahim, CEO).

Business model

Neo.Tax sells tax automation software. In its startup-focused offering it charged a success-based fee of 10% of the R&D tax credit obtained on the customer's behalf, with no cash required up front, including a final review by a former IRS agent; partner channels offered a reduced 7.5% rate. The current enterprise offering is sold through demos to corporate tax and finance teams, with deployment options including single-tenant and customer-hosted (bring-your-own-cloud) configurations.

Fees tied to the R&D tax credit delivered (historically 10% of the credit claimed, 7.5% via certain partners), alongside processing fees that partner marketplaces discounted for referred customers.

Traction

The company reported a prior $3 million seed round in 2020 and a $10 million Series A in February 2022. Marketing materials state average customer savings of over $50,000 and first-product credits of up to $250,000 per company. Customer testimonials on the company site reference use for a 2023 credit claim, reduced interview volume and elimination of an external advisor cost.

Latest developments

Neo.Tax's current product line centers on continuously running AI agents that generate audit-ready R&D tax credit studies plus §174 R&D capitalization and ASC 350-40 software capitalization outputs, with enterprise security features including SOC 2 Type II certification, single-tenant and bring-your-own-cloud deployments and isolated LLMs.