Posted by Robert Bryant, Esq., CPA on 06.21.24

In a stunning reversal, the IRS has just announced that effective immediately, the Service is no longer requiring two key and convoluted additional contemporaneous exhibits to be included on an amended IRC Section 41 R & D claim. 

Back in 2021 the IRS Chief Counsel announced a mandatory filing requirement that specific, additional information was necessary to file an amended income tax return, if that return included an IRC Section 41 R & D claim.  The additional filing information included: 

1. Identify all business components of the claim
2. Within each business component 
   • Identify all research activities performed 
   • Name of the individuals who performed the research activity 
   • Information each individual sought to discover '
3. total qualified expenses incurred during the amended tax year 

While most reputable tax consultants will easily have this information for their clients, the IRS did not provide any kind of detailed explanation as to how the additional information should be presented.  Further adding to the new filing requirement chaos, the Service also included confusing perfecting rules for taxpayers. 

Effective June 18, 2024, two of these key filing requirements are no longer necessary: 

1. the names of the individuals who performed each research activity, and 
2. the information each individual sought to discover. 

Therefore the IRS is only requiring the following information on an amended tax return which has an R & D claim: 

1. Identify all business components of the claim
   •  Within each business component, identify the research activities performed  

2. total qualified expenses incurred during the amended tax year 

Of course, while these two pieces of information are not required when a research credit refund claim is filed with the IRS, this information may be requested when a refund claim is selected for an IRS audit.  

Finally, the IRS is making this change due to "significant experience with the Research Credit refund claims process." 

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