Questions about the R&D Credit?
Questions about IRS requirements?
LMSB published Industry Directive #2 on January 15, 2009, which addresses the Service’s continued concerns about the lack of documentation supporting Research Credit Claims:
“Research credit claims continue to be filed using marketed tax products supported by studies. The Issue Management Team (IMT) has concerns that some studies used to support RC Claims lack adequate documentation, use high-level estimates which are based upon invalid assumptions and lack nexus between qualified research expenses (QREs) and the business component.”
Industry Directive #2 is comprised of four components:
- It defines a “claim” covered under the Tier 1 designation
- It establishes the Mandatory IDR (Information Document Request) as the first step of the audit procedure
- It centralizes the filing of all Research Credit Claims in the Ogden Service Center
- It asserts a penalty of 20% of the disallowed portion of a Research Credit Claim under IRC Section 6676.
