IRS restrictions on research credit elections might lead to 'Mayo' review

Recently published final research credit regulations retain provisions from 2008 proposed regulations relating to the election of the alternative simplified credit (ASC) under section 41(c)(5) that taxpayers and practitioners had criticized as overly restrictive. If a taxpayer were to challenge the validity of those provisions in court, the Supreme Court's decision in Mayo earlier this year presumably would be applied in reviewing the regulations. Under the contested provisions of the final regulations, (1) an extension of time to make or revoke an ASC election under section 41(c)(5) will not be granted under Reg. sec. 301.9100-3 ("9100 relief") and (2) ASC elections may not be made or revoked on an amended return.