Smith v. Commissioner, a pending research credit case in the United States Tax Court, presents an issue of first impression: Is a partner’s self-employment income in a partnership allowable as a qualified research expense...more
Over an objection by the IRS, the Tax Court recently ruled in Kapur v. Commissioner that it could limit discovery and permit statistical sampling of voluminous data related to a claimed research credit. The court refused,...more
Congress perhaps made an unintended drafting error in the Tax Cuts and Jobs Act (TCJA) when it required a taxpayer to decrease its deduction for research and experimental expenditures....more
The recent Tax Court opinion in Hyatt Hotels Corporation v. Commissioner of Internal Revenue informs a federal income taxpayer about its tax responsibility for funds for a guest reward program: when the taxpayer will be...more
Key Takeaways:
..A pending U.S. Tax Court case presents an interesting theory to preclude the federal income tax disallowance of all deductions of a marijuana business.
..The theory rests on a provision in the 2017 Tax...more
In two recent cases, the IRS has tried to defeat research credit refund claims on procedural grounds, rather than simply litigating whether the substantive nature of the asserted research meets the requirements of section 41...more
8/6/2021
/ Audits ,
Failure To State A Claim ,
Internal Revenue Code (IRC) ,
IRS ,
Pending Legislation ,
Research and Development ,
SBA ,
Scientific Research ,
Small Business ,
Tax Credits ,
Tax Deductions ,
Tax Refunds
For practitioners advancing research credit claims, a recent Tax Court case is of concern because it said more than was necessary to reject the taxpayer's claim. The Commissioner may seize upon dicta in the opinion to...more
The IRS Large Business and International Division ("LB&I") announced a campaign on February 27, 2020, to examine taxpayers' returns claiming income tax credits and deductions for research expenditures under IRC Sections 41...more