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The IRS released this preview in order to solicit feedback from stakeholders in advance of the official Form 6765 release. If these changes are implemented, the IRS states they will be effective beginning with the 2024 tax year.
The proposed changes include:
The proposed changes are intended to:
Additionally, the IRS is requesting feedback on whether Section F of Form 6765 should be optional for certain taxpayers including those with:
The release clarifies that even if Section F were optional for certain taxpayers, it would not affect the requirement to maintain supporting documentation. Section F information should be readily available in a similar format, if requested, and would not apply to amended returns for the research credit.
The IRS is requesting feedback for each suggested change to Form 6765, potential Section F items, and any questions regarding the proposed changes. Feedback and questions on the proposed changes are to be submitted to Lbi.rt.team@irs.gov with the subject line: "Feedback/Questions F6765" by Oct. 31, 2023. Any and all comments submitted by the deadline will be taken into consideration before any changes are finalized and implemented for Form 6765.
The IRS expects that the potential changes to the form will ultimately help the agency accomplish some of the objectives in its Inflation Reduction Act Strategic Operating Plan. The IRS annually receives thousands of returns from taxpayers claiming the Research Credit. To provide effective tax administration for this area, the IRS must ensure taxpayers understand what is required to support claiming the Research Credit.
Chief Counsel Memorandum CCM 2021410F was released in October 2021, outlining the requirement for taxpayers to provide additional detail on refund credit claims. These requirements included identification of business components to which the Research Credit claim relates for the tax year, identification of all research activities performed, identification of the individuals who performed each activity as well as the information sought to discover for each employee.
While there had previously been uncertainty as to whether the Chief Counsel Memorandum applied to timely filed tax returns with a refund for the Research Credit or only to amended refund claims, the new proposed sections in Form 6765 clarify that this information is to be provided on all research credit claims.
This further emphasizes the necessity of taxpayers to maintain contemporaneous documentation and complete a detailed annual research credit study to ensure all required qualitative information is documented and maintained for the research credit, in addition to calculating a credit and placing it in the tax return.
Please contact your Mazars professional for additional information.
Authors
Ryan Vaughan, Partner
Andrew Kosoy, Senior Manager
Kayla Cancel, Senior
The information provided here is for general guidance only, and does not constitute the provision of tax advice, accounting services, investment advice, legal advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisers.
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