The IRS recently announced several notable changes to the process of claiming the R&D Tax Credit, announcing welcome reductions to requirements for filing amended R&D Credit claims and reduced requirements for the proposed Form 6765. In response to feedback, the IRS has revised the draft Form 6765 and has also waived some of the requirements for refund claims. These changes aim to reduce taxpayer burden while maintaining an improved level of information received for tax administration. The revised Section G of Form 6765 will also be optional for all filers for tax year 2024 and will become effective for tax year 2025....

The recent MBJ v. Commissioner ruling highlights the important role of contract language in determining eligibility for Research and Development (R&D) Credits. MBJ, a structural engineering firm, had $190,000 in credits disallowed due to inadequate contract language. Although MBJ's contracts allowed for phase inspections and termination for substantial failure to perform, they lacked explicit provisions making payments contingent on the success of R&D efforts or refunding payments if the client found the work deficient. ...

A recent Tax Court ruling in S Moore v. Commissioner serves as a reminder of the important role documentation plays in supporting claims for research credits. In this case, the Tax Court disallowed a tax credit for research expenses claimed by a married couple due to inadequate documentation....