HP (Hewlett Packard) R&D Tax Credit – Gross Receipts includes Other Domestic Income Sources
In a ruling dated September 24, 2012, the Tax Court held in the HP (Hewlett Packard) R&D tax credit case that gross receipts for purposes of determining the average annual prior 4 year receipts is not limited to line 1 minus returns and allowances (line 1c)....
New Decision in Bayer R&D Credit Case
In a ruling on a Motion for Partial Summary Judgment filed September 20, 2012, the District Court hearing the Bayer R&D tax credit case denied the government’s Motion for Partial Summary Judgment. The government was seeking partial summary judgment arguing that...
R&D Case – Union Carbide (UCC) Appeal – Supplies Must be Direct R&D Expenses
In a decision dated September 7, 2012 relating to the Union Carbide (UCC) case, the Appellate Court agreed with the Tax Court on the topic of R&D tax credit supply costs. UCC argued it should be entitled to R&D costs and the credit for both supplies purchased...
End of Tier I Program for R&D Credit
The IRS released a statement on August 17 that it is ending its tiered issue program which includes the R&D tax credit, and will turn over review of previously listed issues to the newly organized issue practice groups (IPGs) and international practice networks...
Research Credit Extension Update August 2012
On Thursday August 2, the Senate Finance Committee approved a tax extenders package including the R&D tax credit, wind energy credit and the AMT patch. This is a positive step towards addressing the R&D credit for 2012 and 2013 and the legislation is expected...
Section 199 – Online Software – New CCA IRS Guidance
This week the IRS released a new Chief Counsel Advisory Opinion (CCA) regarding Online Software and Section 199. The key issue was applying the exception for software that is ‘substantially identical’ available from third parties via download or shrink-wrap. Thus, a...
Basim Shami Case – R&D Credit – Wages of Executives
In a recent TC Memo case, the Tax Court determined that certain higher level individuals within a cosmetics company did not materially participate in the R&D process (or at least did not prove they participated) to substantiate their R&D claim. In Basim Shami...
R&D Credit Extension on Horizon?
The Senate Finance Committee is currently weighing whether to include any expired business tax credits in with the payroll tax, including the R&D tax credit. However a vote appears likely on the payroll tax cut on Friday with no inclusion of the R&D credit in...
Bayer’s Motion to Adopt Statistical Sampling in Research Credit Case Denied
In a ruling dated February 6, 2012, the District Court for the Western District of Pennsylvania has denied Bayer’s Amended Motion for a Case Management/Protective Order Based on Statistical Sampling in its R&D credit case. Bayer is one of the largest...
Section 199 – IRS Issues Guidance on Benefits and Burdens of Ownership
In a new Field Directive issued February 1, 2012, the IRS has provided examiners guidance on reviewing facts to determine which party to a transaction has the benefits and burdens of ownership in order to claim the Section 199 Domestic Production Manufacturing...
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