Source: https://www.federalregister.gov/documents/2014/06/03/2014-12757/alternative-simplified-credit-election
Timestamp: 2020-08-08 03:28:05
Document Index: 439646030

Matched Legal Cases: ['§\u20091', '§\u2009301', '§\u20091', '§\u20091', '§\u20091', '§\u20091', '§\u2009301', '§\u20091', '§\u20091', 'art 1']

A Rule by the Internal Revenue Service on 06/03/2014
31863-31865 (3 pages)
https://www.federalregister.gov/d/2014-12757
Effective Date: These regulations are effective on June 3, 2014.
Applicability Date: For dates of applicability, see § 1.41-9T(d).
End Further Info End Preamble Start Supplemental Information Start Printed Page 31864
On June 10, 2011, the Treasury Department and the IRS published final regulations (TD 9528) in the Federal Register (76 FR 33994) relating to the election and calculation of the ASC. Section 1.41-9(b)(2) provides that a taxpayer makes an election under section 41(c)(5) by completing the portion of Form 6765, “Credit for Increasing Research Activities,” (or successor form) relating to the ASC election, and attaching the completed form to the taxpayer's timely filed (including extensions) original return for the taxable year to which the election applies. Section 1.41-9(b)(2) also provides that a taxpayer may not make an election under section 41(c)(5) on an amended return and that an extension of time to make an election under section 41(c)(5) will not be granted under § 301.9100-3.
Following the publication of TD 9528, the Treasury Department and the IRS received requests to amend the regulations to allow taxpayers to make an ASC election on an amended return. The requests explained that the burden of substantiating expenditures and costs for the base period under the regular credit can be costly, time-consuming, and difficult, and suggested that taxpayers often need additional time to determine whether to claim the regular credit or the ASC.
In response to these requests, this Treasury Decision provides final and temporary regulations. The final regulations remove the rule in § 1.41-9(b)(2) that prohibits a taxpayer from making an ASC election for a tax year on an amended return. In its place, these temporary regulations provide a rule that allows a taxpayer to make an ASC election for a tax year on an amended return. However, permitting changes from the regular credit to the ASC on amended returns could result in more than one audit of a taxpayer's research credit for a tax year. Accordingly, the temporary regulations provide that a taxpayer that previously claimed, on an original or amended return, a section 41 credit for a tax year may not make an ASC election for that tax year on an amended return. In addition, the temporary regulations provide that a taxpayer that is a member of a controlled group in a tax year may not make an election under section 41(c)(5) for that tax year on an amended return if any member of the controlled group for that year previously claimed the research credit using a method other than the ASC on an original or amended return for that tax year. As with all claims under section 41, taxpayers must maintain sufficient books and records to substantiate the credit on the amended returns.
These regulations apply to elections with respect to taxable years ending on or after June 3, 2014. In addition, a taxpayer may rely on § 1.41-9T(b)(2) to make an election under section 41(c)(5) for a tax year ending prior to June 3, 2014 if the taxpayer makes the election before the period of limitations for assessment of tax has expired for that year.
Section 1.41-9T also issued under 26 U.S.C. 41(c)(5)(C). * * *
(2) [Reserved]. For further guidance, see § 1.41-9T(b)(2).
(a) through (b)(1) [Reserved]. For further guidance, see § 1.41-9(a) through (b)(1).
(2) Time and manner of election. A taxpayer makes an election under section 41(c)(5) by completing the portion of Form 6765, “Credit for Increasing Research Activities,” (or successor form) relating to the election of the ASC, and attaching the completed form to the taxpayer's timely filed (including extensions) original return for the taxable year to which the election applies. A taxpayer may make an election under section 41(c)(5) for a tax year on an amended return, but only if the taxpayer has not previously claimed the section 41 credit on its original return or an amended return for that tax year. An extension of time to make an election under section 41(c)(5) will not be granted under § 301.9100-3 of this chapter. A taxpayer that is a member of a controlled group in a tax year may not make an election under section 41(c)(5) for that tax year on an amended return if any member of the controlled group for that tax year Start Printed Page 31865previously claimed the research credit using a method other than the ASC on an original or amended return for that tax year. See paragraph (b)(4) of this section for additional rules concerning controlled groups. See also 1.41-6(b)(1) requiring that all members of the controlled group use the same method of computation.
(b)(3) through (c) [Reserved]. For further guidance, see § 1.41-9(b)(3) through (c).
(d) Effective/applicability date. Paragraph (b)(2) of this section applies to elections with respect to taxable years ending on or after June 3, 2014. In addition, a taxpayer may rely on paragraph (b)(2) of this section to make an election under section 41(c)(5) for a tax year ending prior to June 3, 2014 if the taxpayer makes the election before the period of limitations for assessment of tax has expired for that year. Otherwise, for elections with respect to taxable years ending before June 3, 2014, see § 1.41-9(b)(2) as contained in 26 CFR part 1, revised April 1, 2014.
Approved: May 2, 2014.
[FR Doc. 2014-12757 Filed 6-2-14; 8:45 am]