So you want to study the source of the R&D Credit regulations?
You’ve come to the right place. On the right is a compilation of the law pertaining to the R&D Tax Credit. It’s broken down into these logical sections:
Legislation: Legislation is where all laws begin. What is happening on Capitol Hill? What are the law makers doing that could affect the current and future R&D Tax Credit?
Regulations: Once Congress passes a bill, and it’s signed by the President, it becomes law. However, regulations need to be developed to provide detail and clarity around the Congressional intent of the passed bill. For tax law, it’s the Treasury Department’s responsibility to write the regulations and execute this new law.
Statutes: Once the tax regulations are finalized, they are “codified” in the Internal Revenue Code (IRC). This is the document (currently over 10,000 pages long!) that spells out all the rules that we as taxpayers are bound to. Section 41 of the IRC is where you’ll find the backbone of the R&D Tax Credit rules, and the best place for you to start your research.
Case Law: As with all codified law, the interpretation of the statues is not always clear. If a taxpayer and the IRS disagree on this interpretation, they can ultimately argue their opinions in tax court. The decisions of the tax court judges continue to define the correct implementation of the law, from the legislative intent through the codified statues.
Audits: The first four sections of this R&D Tax Credit Legal Database are the embodiment of the law. The application and enforcement of this tax law is done by the IRS. Their procedures are established by the IRS Commissioner; however, the IRS is not authorized to “make law”. Therefore, as a taxpayer, it’s valuable for you to understand your rights and responsibilities if your tax return is chosen for an audit.
Happy Reading! As always, if you have questions or comments concerning this information, please call or email us. We’re here to help!
