IRC § 174(a) – Treatment as expenses
(1) In general. A taxpayer may treat research or experimental expenditures which are paid or incurred by him during the taxable year in connection with his trade or business as expenses which are not chargeable to capital account. The expenditures so treated shall be allowed as a deduction.
(2) When method may be adopted.
(A) Without consent. A taxpayer may, without the consent of the Secretary, adopt the method provided in this subsection for his first taxable year—
(i) which begins after December 31, 1953, and ends after August 16, 1954, and
(ii) for which expenditures described in paragraph (1) are paid or incurred.
(B) With consent. A taxpayer may, with the consent of the Secretary, adopt at any time the method provided in this subsection.
(3) Scope. The method adopted under this subsection shall apply to all expenditures described in paragraph (1). The method adopted shall be adhered to in computing taxable income for the taxable year and for all subsequent taxable years unless, with the approval of the Secretary, a change to a different method is authorized with respect to part or all of such expenditures.
