For tax years beginning after December 31, 2021, specified research and experimental expenditures (“SRE”) under IRC §174 are required to be capitalized and amortized. The amortization period is 5 years for domestic expenditures and 15 years for foreign expenditures.

On August 1^st, the Senate voted against the Tax Relief for American Families and Workers Act of 2024 (H.R. 7024) by a vote of 48-44. The bill, which previously passed the House overwhelmingly 357 to 70, would have restored crucial research and experimentation (“R&E”) deductions for taxpayers, as well as other tax relief for businesses. Specifically, if passed, the new provisions would have allowed taxpayers to immediately deduct R&E costs, delaying the capitalization requirement for domestic R&E expenses until December 31, 2025. However, as a result of the Senate’s vote, taxpayers will continue to be required to capitalize and amortize IRC § 174 R&E costs for tax years ending after December 31, 2021 over five or fifteen years, depending on whether research is domestic or foreign.

On July 22, 2024, the IRS announced tax relief for individuals and businesses in 67 Texas counties affected by Hurricane Beryl, including the postponement of certain tax filing and payment deadlines for taxpayers in designated areas. Specifically, this relief postpones various tax filing and payment deadlines until Feb. 3, 2025, for such deadlines that occurred from July 5, 2024 through Feb. 3, 2025 (the “postponement period”). This relief also provides extensions for other tax-related actions to help those affected meet their obligations without additional penalties or interest.

The IRS has published a draft version of the Form 6765 Credit for Increasing Research Activities, also known as the R&D Tax Credit. The draft Form 6765 requests much of the same information that the Service began requiring for amended returns in 2022, detailed in our blog New Filing Requirements for R&D Credit.

In the fall of 2021, the IRS announced through a memo from the IRS Office of Chief Counsel that there would be New Filing Requirements for R&D Credit when a taxpayer submits a claim for a refund. The requirements went into effect for all claims after 1/10/2022.