The IRS has issued a Legal Advice setting forth the information that taxpayers will be required to include for a research credit claim for refund to be considered valid.

Specifically, the CCA provides that for a research credit claim for refund to be considered a valid claim, taxpayers are required to provide the following information at the time the refund claim is filed with the IRS:

  • Identify all the business components to which the research credit claim relates for that year.
  • For each business component, identify all research activities performed and name 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, Credit for Increasing Research Activities.

The Information Release says that the IRS will provide a grace period until January 10, 2022, before requiring the inclusion of this information with timely filed research credit claims for refund. Upon the expiration of the grace period, there will be a one-year transition period during which taxpayers will have 30 days to perfect a research credit claim for refund prior to the IRS’s final determination on the claim.

The IRS will be releasing more details; however, taxpayers may begin immediately providing this information.


Source:  Checkpoint Newsstand 10/28/21