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New Requirements for Refunds on Research Credit Claims

New Requirements for Refunds on Research Credit Claims

by Scott Lawrence

By October 26, 2021September 6th, 2023Insights

On October 15, 2021, the Internal Revenue Service (IRS) released its Chief Counsel Memorandum, which outlines new requirements for claiming a tax credit refund for the Research & Development (R&D) Tax Credit. Specifically, when claiming a refund for the R&D Tax Credit, taxpayers are required to provide the information below with their tax return:

  • Identify all business components to which the research credit claim relates for the respective tax year;
  • For each business component, identify all research activities performed and name the individuals who performed each research activity, as well as the information each individual sought to discover; and
  • Provide the total qualified employee wage expenses, supply expenses and contract research expenses for the claim year. This can be done by using Federal Form 6765, which is the Federal R&D Tax Credit form.

Further, the taxpayer is required to provide a declaration signed under penalties of perjury verifying that the facts provided are accurate. The facts must be provided via a written statement rather than a production of documents. This new requirement takes effect on January 10, 2022. Given the requirements set out by the IRS are generally vague and the general complexities of claiming the R&D tax credit, it is important to speak to an experienced tax advisor.

We’re Here to Help

Bennett Thrasher has a dedicated team of advisors to assist with claiming the R&D Tax Credit. If you have any questions, please contact Betsi Barrett or Nina Desai by calling 770.396.2200.