With the beginning of tax filing season starting at the end January, many taxpayers and tax professionals are starting to prepare for the 2023 tax year and looking at the everchanging field of the research tax credit. Some of those changes start at a state level with several states enacting new legislation or changes to [...] The post Important Updates to State R&D Credits appeared first on Hull & Knarr - Fueling Innovative Business ..read more

The intersection of IRC 174 and software development represents an unfavorable tax position and is a critical juncture in tax policy and its impact on software innovation. On September 8, 2023, the IRS issued Notice 2023-63 which contains guidance clarifying the application of Section 174 to the costs of software.  The Notice states that businesses [...] The post IRC 174 and Its Impact on Software Developers appeared first on Hull & Knarr - Fueling Innovative Business ..read more

In response to the IRS’s recently proposed changes to Form 6765, Credit for Increasing Research Activities, Hull & Knarr submitted comments to the IRS to provide feedback. In the letter below, Hull & Knarr requests that the IRS’s proposed changes to the Form be modified to simplify the compliance process for taxpayers claiming the research [...] The post Hull & Knarr Shares Comment Letter on IRS’s Proposed Changes appeared first on Hull & Knarr - Fueling Innovative Business ..read more

In recent months, the IRS has announced several measures it is taking to protect businesses from scams tied to the Employee Retention Credit (ERC). In September, the agency announced a moratorium on processing new ERC claims through the end of 2023, and in mid-October it has announced details of a special withdrawal process for companies [...] The post IRS Makes Announcement to Help Curb Fraudulent ERC Claims appeared first on Hull & Knarr - Fueling Innovative Business ..read more

The recent release of Notice 2023-63 has sent ripples across the corporate sector. Issued on Friday, September 8, 2023, it provides much-needed clarity on a slew of questions, especially those centered around Section 174 pertaining to research and experimental expenditures. Below, we delve into the primary issues addressed by the notice: Contract Researcher Arrangements: The [...] The post 174 Amortization Guidance is here! appeared first on Hull & Knarr - Fueling Innovative Business ..read more

The IRS announced on Oct. 15 that beginning in January 2022, specific minimum requirements will be in place for taxpayers seeking a research tax credit claim for refund. The Chief Counsel Memorandum that was released is designed to manage research credit issues and better determine upfront whether a refund claim should be paid immediately or whether further [...] The post IRS Adds Requirements for Taxpayers Seeking Refund R&D Credit Claims appeared first on Hull & Knarr - Fueling Innovative Business ..read more

Back in October, the IRS added additional requirements for taxpayers filing amended research credit claims beginning on January 10, 2022. In a January 3, 2022, memo, the IRS provided interim procedural guidance for applying the new requirements for research credit claims. Below are some key takeaways addressed in the memo: The memo provides a brief [...] The post IRS Adds Guidance for Taxpayers Filing Amended Research Credit Claims appeared first on Hull & Knarr - Fueling Innovative Business ..read more

The IRS’s Office of Fraud Enforcement has recently informed those who prepare the Employee Retention Credit (ERC) of the potentially fraudulent activity they have witnessed on the filed amended tax returns.  This fraudulent activity included fictitious businesses, identity theft, and inflated or false Employee Retention Credits.  Some specific examples include: ID Theft – Multiple original [...] The post IRS Issues Fraud Warnings Regarding the Employee Retention Credit appeared first on Hull & Knarr - Fueling Innovative Business ..read more

An encouraging development has emerged in the world of Research Tax Credits as H.R. 5056, Fostering Innovation and Research to Strengthen Tomorrow Act was recently introduced in the House Ways and Means committee signaling potential changes to Research Tax Credits. This proposed legislation has the potential to double the credit, but it is not clear [...] The post Unleashing Growth: The Impact of the Newly Proposed Bill on Research Tax Credits appeared first on Hull & Knarr - Fueling Innovative Business ..read more

Under the 2017 Tax Cuts and Jobs Act, there was an important tax law change related to Sec. 174 Research Expenses that will impact the 2022 Tax Return for companies performing R&D activities. Effective for tax years beginning after December 31, 2021, research expenditures are no longer 100% deductible in the year they were incurred. [...] The post Impact of Section 174 Requirements appeared first on Hull & Knarr - Fueling Innovative Business ..read more