Cost segregation is one of the most powerful tax strategies available to commercial property owners, allowing you to dramatically accelerate depreciation, reduce taxable income, and improve cash flow. But the success—and the safety—of a cost segregation study depends entirely on the firm conducting it.
Not all providers are created equal. In fact, many get critical pieces of the process wrong, leaving clients exposed to IRS scrutiny, frustrated CPAs, and missed opportunities.
If you’re considering a study, here’s your comprehensive checklist for evaluating a cost segregation specialist—plus how we deliver on each point with precision and integrity.
1. Do They Provide IRS-Compliant Form 3115 and Proper Land Value Allocations?
What to look for:
The IRS requires Form 3115 to formally change a method of accounting and claim missed depreciation. Additionally, land values must be allocated properly to avoid overstating deductions.
What sets us apart:
We include Form 3115 with every study and follow IRS-compliant land allocation methods. Any fees associated with the form are clearly disclosed up front—no surprises for you or your CPA.
2. Are Their Tax Savings Estimates Conservative and Realistic?
What to look for:
Some providers inflate projections to win your business, leaving you disappointed when actual savings fall short.
What sets us apart:
We take a conservative, data-driven approach. Our estimates are grounded in experience and engineered accuracy—so you know exactly what to expect, and can plan accordingly. Ask any competitors directly – how do you calculate the savings, how big is your database, and how often do you hit your projections?
3. Do They Have Proven Experience and Industry Expertise?
What to look for:
Your specialist should possess in-depth knowledge of engineering, construction, and tax law, with experience across various property types.
What sets us apart:
Our team brings decades of experience across office, industrial, multifamily, retail properties and specialty properties, such as golf courses and mobile home parks. We’ve completed over 50,000 studies, adapting to every project type and staying aligned with changing regulations.
4. Is Their Track Record Audit-Free?
What to look for:
An audit-free history is a strong signal that a firm’s studies are precise, defensible, and compliant with IRS guidelines.
What sets us apart:
We have completed tens of thousands of studies with zero audit triggers—a testament to the strength and integrity of our process.
5. Do They Offer Full Audit Representation?
What to look for:
Even with a strong track record, audit risk exists. Will your provider stand behind their study if the IRS asks questions? Or will they only do so at high hourly rates?
What sets us apart:
We offer unlimited audit representation at no extra cost. If needed, we’ll work directly with your CPA and the IRS to support our findings, so you’re never left to handle it alone.
6. Are They Accessible and Communicative?
What to look for:
Timely access to your provider matters—especially with filing deadlines or when your CPA needs clarification.
What sets us apart:
We pride ourselves on responsiveness. Our team is easy to reach by phone, text, or email—and we follow through. You’ll never be left waiting or wondering.
7. Is Their Team Stable and Well-Supported?
What to look for:
Frequent turnover or poor internal systems often lead to delays and inconsistent service.
What sets us apart:
Our firm enjoys low turnover, strong internal support, and a positive culture that retains knowledgeable professionals—ensuring quality and consistency throughout the process.
8. Do They Confirm Land-to-Structure Values Before Starting?
What to look for:
Failing to correctly identify land versus building value upfront can undermine the entire study. Unethical firms will start with artificially high land value to promise you unrealistic results. They either change the value later or leave you at risk of the IRS rejecting the land valuation.
What sets us apart:
We verify land allocation before starting, collaborating with you and your tax advisor to ensure accuracy and maximize benefit.
9. Are They Transparent About Fees?
What to look for:
Some firms bury hidden fees in fine print or take a percentage of your savings — a practice that can quickly erode your ROI.
What sets us apart:
Our pricing is flat-rate and fully transparent. All aspects of the study—engineering, travel, CPA consultations, and audit representation—are included. No surprise charges.
10. Do They Explain Depreciation Recapture?
What to look for:
Many providers focus only on short-term savings and avoid discussing long-term tax implications like depreciation recapture.
What sets us apart:
We take a comprehensive view of your investment, advising on recapture, ROI, and how depreciation timing aligns with your exit strategy and reinvestment goals. We want your cost segregation strategy to work for the long haul.
The Bottom Line
Choosing the right cost segregation specialist can be the difference between unlocking substantial tax benefits and facing preventable headaches. Prioritize experience, transparency, audit support, and proven results.
At CSSI, we’ve earned the trust of thousands of commercial property owners and tax professionals by consistently delivering engineering-based studies that hold up under scrutiny—while putting clients first every step of the way.
Let’s talk about how cost segregation can work for you—safely, strategically, and successfully.
