IRS Amends Regs to Allow Alternative Research Credit Election on Amended Returns

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The IRS has amended Reg. §1.41-9(b)(2) by removing a restriction that prevents a taxpayer from making an election on an amended return to compute the research credit using the alternative simplified credit (ASC) computational method described in Code Sec. 41(c)(5).

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IRS Amends Regs to Allow Alternative Research Credit Election on Amended Returns

  1. 1. 1 | P a g e June 4, 2014 IRS Amends Regs to Allow Alternative Research Credit Election on Amended Returns The IRS has amended Reg. §1.41-9(b)(2) by removing a restriction that prevents a taxpayer from making an election on an amended return to compute the research credit using the alternative simplified credit (ASC) computational method described in Code Sec. 41(c)(5). A temporary regulation is added to provide that the ASC election for a tax year may be made on an amended return provided that the credit for that tax year was not previously claimed on an original or amended return. In addition, a member of a controlled group may not make an ASC election for a tax year on an amended return if any member of the controlled group previously claimed the research credit for that tax year using a method other than the ASC method on an original or amended return. The IRS made these changes in response to practitioner comments that the information necessary to determine whether to make the ASC election is difficult to obtain by the due date of the original return. The regulations apply to elections with respect to tax years ending on or after June 2, 2014. A taxpayer may apply the regulations to a tax year ending prior to June 2, 2014, if the taxpayer makes the ASC election before the period of limitations for assessment of tax expires for that tax year. The text of the temporary regulations also serves as the text of proposed regulations. The IRS requests comments on all aspects of the proposed regulations. A public hearing will be scheduled if requested in writing by any person that timely submits written comments. Copyright © 2014, CCH INCORPORATED. All Rights Reserved. Contents of this publication may not be reproduced without the express written consent of CCH and CBIZ. To ensure compliance with requirements imposed by the IRS, we inform you that-unless specifically indicated otherwise-any tax advice in this communication (and any attachments) is not written with the intent that it be used, and in fact it cannot be used, to avoid penalties under the Internal Revenue Code, or to promote, market, or recommend to another person any tax related matter. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein. CBIZ MHM is the brand name for CBIZ MHM, LLC and other Financial Services subsidiaries of CBIZ, Inc. (NYSE: CBZ) that provide tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies.

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