White Papers

Research Credit Refund Claims – New IRS Requirements

Published in Thomson Reuters Corporate Taxation May – June 2022 Issue

By Yair Holtzman, Sharlene Sylvia and Michael Ganz

In an IRS Chief Counsel Memorandum, No. 20214101F, released on 10/15/2021, the IRS notified taxpayers of additional detailed information that will be required when claiming valid research credit refunds. Treasury Regulations require that for a refund claim to be valid, it must set forth sufficient facts to apprise the IRS of the basis of the claim. The Chief Counsel Memorandum is intended to improve tax administration efficiency by providing taxpayers with clear instructions to claim the credit and by reducing the number of disputed claims.

Each year, the IRS receives thousands of research credit refund claims for amounts in the hundreds of millions of dollars from corporations, businesses, and individual taxpayers. Claims for the research credit are currently examined in a substantial number of cases and consume significant resources for both the IRS and taxpayers.

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YAIR HOLTZMAN, CPA, MBA, MS, CGMA, CPD, is a partner at Anchin, where he is Practice Leader of the firm’s Research & Development (R&D) Tax Credits Group, Life Sciences Industry Group, and Chemicals and Energy Industry Group, as well as Co-Practice Leader of the Tax Credits & Incentives Group. SHARLENE SYLVIA, CPA, MST, is a senior manager at Anchin and MICHAEL GANZ is a tax manager at Anchin.