New IRS/Treasury "business plan" calls for important research credit guidance

Washington National Tax Services

According to the 2012-2013 IRS/Treasury priority guidance plan (commonly known as the business plan) released yesterday, the government is working on guidance to address three important and long-standing topics related to the section 41 research credit: Regulations on the exception from the definition of "qualified research" for internal-use software under section 41(d)(4)(E); Regulations on whether the gross receipts component of the research credit computation for a controlled group under section 41(f) includes gross receipts from transactions between group members; and Guidance on the treatment of research expenses incurred in making prototypes that may be used in a taxpayer's trade or business or be held for sale.

This WNTS Insight will examine the key issues this forthcoming guidance is likely to address.



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