R&D tax credit: Don’t leave money on the table
Many taxpayers do not realize that the R&D tax credit is available to businesses of all sizes in many lines of business, not just major corporations conducting tests in research laboratories.
Credits
A new safe harbor for LB&I taxpayer R&D credits
A new directive allows taxpayers to use R&D costs reported on FASB ASC financial statements as the starting point for computing QREs.
IRS issues regulations on premium tax credit
The IRS issued final regulations that govern the relief available for victims of domestic abuse or abandonment from the requirement that married taxpayers must file joint income tax returns to qualify for the Sec. 36B premium tax credit.
Practical Documentation of QRAs for the R&D Tax Credit
In the absence of records specifically created to document the research tax credit, taxpayers often have to rely on estimates and an assortment of documents, interviews, and other evidence to substantiate expenditures that qualify for the research tax credits.
What LIHTC Project Owners Should Know About New IRS Compliance-Monitoring Rules
IRS regulations and revisions provide state or local housing credit agencies with additional flexibility in implementing monitoring duties.
Recent Guidance Affecting Research Credit Carryforwards From Closed Years
The IRS recently promulgated final regulations that prohibit a taxpayer from increasing research credit carryforwards from closed years by electing the ASC method.
Guidance Extends Certification Deadlines for Reinstated Work Opportunity Tax Credit
Because of the recent retroactive reinstatement of the work opportunity tax credit to the beginning of 2015 and the addition of the long-term unemployed to the list of qualified employees beginning Jan. 1, 2016, the IRS has extended the due date for required certifications.
IRS Foreshadows New Energy Credit Regulations
This item describes the evolution of the ITC, information about the timing and scope of potential future regulations, and potential issues that the IRS may attempt to address in the guidance.
IRS Announces FY 2014 Sequester Reduction Rate for Qualified Refundable Credit Bonds
Refundable credit payments processed on or after Oct. 1, 2013, and on or before Sept. 30, 2014, will be reduced by a sequestration rate of 7.2% for issuers of various bonds that elected to receive a direct credit subsidy under Sec. 6431.
IRS Changes Stance on Application of Sec. 6662 Penalty to Frozen Refundable Credits
The IRS announced that it would no longer impose a penalty under Sec. 6662 for a substantial understatement of tax when a taxpayer claims a refundable tax credit he or she is not entitled to, but the IRS does not pay the refund or approve the credit.
President Signs Bill Increasing EITC Due Diligence Penalty
President Barack Obama signed into law a bill that increases from $100 to $500 the penalty for failure by preparers to exercise due diligence with respect to the EITC.
First-Time Homebuyer Credit Recapture Causing IRS Processing Problems
The IRS announced that it is having problems processing tax returns that involve repayment of the Sec. 36 first-time homebuyer credit for 2008 home purchases.
Disagreements Between Taxpayers and the IRS over Substantiating the R&D Credit
The incentive effect of the R&D credit has been severely dampened by the fact that defending the credit during an IRS audit can be a long and frustrating process for taxpayers. But there are several vague and subjective terms in the body of the R&D tax credit law that are interpreted very differently by taxpayers, the courts, and the IRS.
Penalty for Failing to Meet EIC Due Diligence Requirements Can Be Assessed Against Employer or Employee
The Office of Chief Counsel (OCC) advised that after the amendments to the regulations in T.D. 9436 in December 2008, the IRS continues to have the authority to assert the penalty against either the employee-preparer of a return or his or her employer for failing to meet the earned income credit (EIC) due diligence requirements. However, the IRS cannot impose a penalty against both an employee-preparer and the employer based on the same factual situation. In addition, the OCC advised that the signing preparer of a tax return is responsible for retaining the records showing that the preparer met the EIC due diligence requirements.
IRS Guidance on Small Business Health Care Tax Credit
On May 17, the IRS issued a notice providing guidance to small businesses that are eligible to claim a tax credit for employee health insurance coverage.
Defending R&D Credits
This article highlights and analyzes some recent decisions concerning the research and development (R&D) tax credit and IRS administrative practices when auditing R&D credit claims, most notably the Union Carbide decision in the Tax Court.
