Smith v. Commissioner, a pending research credit case in the United States Tax Court, presents an issue of first impression: Is a partner’s self-employment income in a partnership allowable as a qualified research expense...more
The Michigan Department of Treasury released a draft of a notice regarding the new research and development credit. ...more
HB 5100 and HB 5101, as passed by the Michigan House of Representatives and Senate, and to be signed by Governor Gretchen Whitmer, provide a new income tax credit. For tax years beginning on and after January 1, 2025,...more
In Grigsby v. United States, the Justice Department used discovery procedures in federal district court essentially to audit a taxpayer’s federal income tax credits for research activities. The court found that the taxpayer...more
Over an objection by the IRS, the Tax Court recently ruled in Kapur v. Commissioner that it could limit discovery and permit statistical sampling of voluminous data related to a claimed research credit. The court refused,...more
The stream of cases challenging disallowance of research tax credits continues in the Tax Court with Phoenix Design Group, Inc. v. Commissioner. The taxpayer in Phoenix Design designs mechanical, electrical, and plumbing...more
A Treasury regulation provides that a researcher performing technological research for its customer is not entitled to federal income tax credits for the cost of the research if the researcher does not retain substantial...more
In two recent cases, the IRS has tried to defeat research credit refund claims on procedural grounds, rather than simply litigating whether the substantive nature of the asserted research meets the requirements of section 41...more
8/6/2021
/ Audits ,
Failure To State A Claim ,
Internal Revenue Code (IRC) ,
IRS ,
Pending Legislation ,
Research and Development ,
SBA ,
Scientific Research ,
Small Business ,
Tax Credits ,
Tax Deductions ,
Tax Refunds
A recent Tax Court decision - which arguably is wrongheaded - could cause many suppliers of production parts to original equipment manufacturers to lose federal income tax credits. Suppliers are well advised to consider...more