IRS Extends Grace Period for Perfecting Research Credit Refund Claims
The IRS has extended the grace period for taxpayers to perfect their research credit refund claims. Taxpayers now have until January 10, 2025, to provide all the required information for a timely filed claim, instead of the previous deadline of a year earlier. The IRS released a Chief Counsel memorandum specifying the essential information that must be included in refund claims. These requirements aim to expedite IRS decisions on refund claims. For more information, read the full article here by Yair Holtzman of Anchin, Block & Anchin LLP (New York).
The Evolution of Research and Experimental Expenditure Deductions and their Impact on Businesses
The passing of the Tax Cuts and Jobs Act in 2017 brought about changes to the deduction options for Research or Experimental (R&E) expenditures. Under the revised law, taxpayers are now required to capitalize and amortize these expenses over five tax years for US expenses and fifteen years for foreign expenses. The IRS recently issued Notice 2023-63, providing interim guidance on updated Section 174 rules. The notice offers valuable information on the definition of specified R&E expenditures, cost allocation, treatment of software development costs, reporting responsibilities, amortization requirements, long-term contracts, and cost sharing. Read the full article here.