New R&D Credit Guidance for Certain Taxpayers with Audited Financials

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Research And Development
Engineered Tax Services
David Mayer


West Palm Beach - Florida - US

WEST PALM BEACH, Fla. - Sept. 27, 2017 - PRLog -- The IRS has issued guidance for Large Business & International (LB&I) taxpayers (i.e., assets over $10 million) that report GAAP ASC 730 R&D costs on certified audited financial statements. This new directive will allow these taxpayers to use an adjusted amount of their ASC 730 R&D costs as their qualified research expenditures (QREs) used to calculate their R&D tax credits. If the requirements of this directive are met, the IRS will not challenge these QRE amounts.

Some possible qualifying expenditures, like contract research, are not included in the "safe harbor" of this directive and would need to be analyzed and included separately in the taxpayer's QRE amount, as appropriate. Such costs outside the purview of this guidance can be claimed but would be subject to risk assessment and possible examination.

This new guidance for LB&I taxpayers that meet the above definition is optional and is available for original returns timely filed, including extensions, going forward. "A significant amount of analysis and planning will be required to properly comply with this new directive. Engineered Tax Services can help LB&I taxpayers and their CPAs navigate these new rules to help maximize their R&D tax credits," said David Mayer, CPA and National Director of ETS.

About Engineered Tax Services

Engineered Tax Services (ETS) is a nationally recognized specialty tax firm owned by tax reform expert, Julio Gonzalez. His company is headquartered in West Palm Beach, Florida with 15 offices nationwide and over 140 employees and consultants. ETS works with many of the Top 100 CPA firms and Fortune 500 companies. Please call (800) 236-6519 or visit for an R&D credit assessment or to learn more.

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