THE NEW RESEARCH CREDIT FINAL REGS.-WHAT'S GONE, WHAT'S NEW, AND WHAT'S MISSING

Like the research endeavors meant to be encouraged by Section 41, the research credit Regulations have continued to evolve. On the whole, the newest set of final Regulations (TD 9104) represents a major step forward, removing some of the obstacles to treating product development activities as "...

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Bibliographic Details
Published in:Journal of Taxation 2004-03, Vol.100 (3), p.144
Main Authors: Arkin, Steven D, Eberle, James M
Format: Article
Language:English
Subjects:
Documentation
Effects
Hypotheses
Product development
Provisions
Research & development expenditures
Tax credits
Tax regulations
Taxpayers
TD 9104
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Summary:Like the research endeavors meant to be encouraged by Section 41, the research credit Regulations have continued to evolve. On the whole, the newest set of final Regulations (TD 9104) represents a major step forward, removing some of the obstacles to treating product development activities as "qualified research." At the same time, additional guidance will be needed in applying the new "process of experimentation" standards to particular industries, and there was little progress on computational and other issues outside of the definition of "qualified research." And with the question of how to treat internal-use software, Treasury and IRS are going back to the drawing board. The new final Regulations appropriately confirm that the critical issue is not what the taxpayer was trying to discover but rather whether the taxpayer conducted an evaluative process of one or more alternatives intended to eliminate uncertainty in the development of a business product or process.
ISSN:0022-4863