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Not All Cost Segregation Studies Are Equal. Here is the Proof.

The IRS recognizes six distinct cost segregation methodologies. The one your firm uses determines how much you find - and what happens if the IRS ever opens the file. Most firms use the cheapest approach. Here’s exactly what that means for you.

16,000+ Studies
125+ Audits Defended
ZERO Losses
$0 Ever Returned
24+ Years
100% U.S. - Based
The IRS Audit Technique Guide

Six Approaches.
Only Two Approaches Find Everything.

The IRS published a 347-page Cost Segregation Audit Technique Guide describing exactly how studies should be performed. It describes six approaches - ranging from the most detailed and accurate to the least. Here is what each means in practice.

Approach
Name
Who Uses It
What the IRS Says
CSA?
1 & 2
Direct Engineering Analysis
Cost Seg America
The most methodical and accurate
✓ Yes
3
Survey / Letter Approach
Limited use
Client-provided surveys, limited documentation
✗ No
4
Residual Estimation
Many other firms
Identifies qualifying only, leaves remainder as straight-line
✗ No
5
Modeling / Software Approach
AKA - the $2900 and under study.
Most low priced firms
Subject to challenge over statistical validity
✗ No
6
Rule of Thumb
Least rigorous
Industry averages only, least accurate
✗ No
Know Before You Sign

Eight Questions to Ask Any Cost Segregation Provider - Before You Commit to Anything.

These questions separate cost segregation providers that actually do the work from firms that sell the appearance of it. A firm doing real engineering work will answer every one of these without hesitation. One that cannot —-or will not - has just told you everything you need to know.

01
Which IRS approach number do you use - by number?
Approaches 1 and 2 are the most thorough. Approaches 4 and 5 involve software estimates that fill gaps where real analysis was never performed. If they cannot give you the approach number, or use phrases like “proprietary methodology” or “best-in-class software,” you have your answer.Cost Seg America: Approaches 1 and 2. Every study. No exceptions.
02
Can you show me a sample individual component schedule from a completed study?
A real cost segregation study produces a line-by-line component schedule - every item in the building named, quantified, individually costed, and supported by a published source citation. Ask to see one before you sign anything. If what they show you has category-level lines like “Electrical Systems - 12% of building cost” with nothing behind the number, that is a software output, not engineering analysis. Your building was never examined. The software made a guess.Cost Seg America will show you a sample component schedule before you commit to anything.
03
Why is any part of my study being performed outside the United States - and who exactly is handling my private financial information?
This is the question most providers hope you never ask. Many present a polished U.S. brand while outsourcing the actual engineering work to teams overseas - India, South Africa, the Middle East - to cut their costs and protect their margins. Your property details, purchase price, tax information, and financial records are being sent to people you have never met, in countries with different privacy laws. Ask them directly: where is the work performed? Who has access to my financial data? Are they employees or contractors?Cost Seg America is 100% U.S.-based. Every analyst. Every study. Your information never leaves the country.
04
If the whole point of this study is to maximize my tax deductions - why would you use an approach that the IRS itself says finds less?
This is the question that exposes the business model behind cheap cost segregation. You are hiring a provider to find every dollar you are legally entitled to. Approaches 1 and 2 find the most. The IRS says so in writing. If a provider is using Approach 4 or 5 instead, they are not doing it for your benefit - they are doing it because it is faster, cheaper to produce, and better for their margin. You pay them. You take the risk. You leave money on the table. They keep the difference.Cost Seg America uses Approaches 1 and 2 because that is the only answer that makes sense for the client.
05
How many IRS audits have you defended - and what was the outcome of every single one?
This is the only question in cost segregation that cannot be faked, padded, or marketed around. Ask for the exact number. Ask for the record. Ask if any client has ever been required to return money, pay penalties, or settle with the IRS because of a study your firm produced.Cost Seg America: 125+ IRS audits over 24 years. Zero losses. Zero dollars ever returned on behalf of any client. Not one.
06
Is your fee flat and fixed - or does it change based on what you find?
A contingency fee - where the cost segregation provider charges a percentage of deductions identified - creates a direct conflict of interest. The provider is financially incentivized to find more, not find correctly. If the fee goes up when deductions go up, their financial interest and your financial interest are not the same thing.Cost Seg America charges a flat fee quoted before you commit. It does not change based on findings. Our results reflect what is actually there - not what maximizes our fee.
07
What does your audit defense actually cover - hours, fees, and how many years out?
Many cost segregation providers advertise audit support in their marketing and quietly limit it to a set number of hours, a short window after delivery, or charge additional fees when the IRS actually opens a file. Ask exactly: are there hour caps? Is there a cutoff date? Are there additional fees if the IRS audits three years from now?Cost Seg America’s audit defense has no hour caps, no time limits, and no additional fees. If the IRS opens your file three years from today, we are there.
08
How long have you been in business - and how many of your completed studies have actually been audited by the IRS?
Years in business tells you staying power. The audit number tells you everything else. A cost segregation provider that has processed thousands of studies but cannot point to meaningful IRS audit experience has never truly been tested.Cost Seg America: 24 years in business. 16,000+ completed studies. 125+ IRS audits. Zero losses. Zero dollars returned. That record was not built on marketing - it was built on methodology.
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