Comment by tlogan
3 years ago
The IRS hasn't provided a clear stance on this issue (ask your tax guy).
However, this will definitely hurt a lot companies because they used R&D tax credit for salaries. Convincing the IRS that certain salaries suddenly don't qualify as R&D could prove challenging.
It's worth noting, though, that the R&D tax credit has been raised to $500,000 per year, which could be beneficial for very small companies.
> Convincing the IRS that certain salaries suddenly don't qualify as R&D could prove challenging
I always felt the R&D tax credit was too good to be true. Like how could a templated, computer generated report from a vendor ever pass muster with the IRS?
Sure you could take the money, then you cease to exist later because you run out of money. And then there's no one to audit and no one to claw back from. But laws and enforcement changes. It's a crazy thing to gamble on.
The IRS could audit every single R&D tax credit company and find loads of skeletons in those closets. Being a customer of an automated R&D tax credit vendor is the only thing on the APB for those offenders.
What were people thinking?