R&D Tax Credit News
IRS Adds Requirements for Taxpayers Seeking Refund R&D Credit Claims
October 19, 2021
The IRS announced on Oct. 15 that beginning in January 2022, specific minimum requirements will be in place for taxpayers seeking a research tax credit claim for refund. The Chief Counsel Memorandum that was released is designed to manage research credit issues and better determine upfront whether a refund claim should be paid immediately or whether further review is necessary.
According to the memo, beginning Jan. 10, 2022, taxpayers seeking a research tax credit claim for refund will be required to provide the following information along with the amended return:
- Identify all the business components to which the Section 41 research credit claim relates for that year.
- For each business component, identify all research activities performed, the individuals who performed each research activity, as well as the information each individual sought to discover.
- Provide the total qualified employee wage expenses, total qualified supply expenses, and total qualified contract research expenses for the claim year. This may be done using Form 6765.
Prior to this notice, the existing regulations only required an amended tax return and accompanying Form 6765 to be filed for a claim for refund. It is unclear if the new requirements will also apply to current tax year return filings, in addition to refund claims filed on amended returns.
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