The AICPA sent a letter[1] to IRS Associate Chief Counsel Holly Porter (Passthroughs and Special Industries) with comments regarding the need for guidance on research and experimental expenditures under IRC §174.

The Tax Cuts and Jobs Act revised IRC §174 so that, effective for tax years beginning after December 31, 2021, specified research or experimental expenditures are no longer currently deductible by a business, but rather must be amortized over 5 years for domestic research and 15 years for foreign research.

Stalled Attempt to Restore the Full Expensing of Such Costs

One of the regular budget games Congress has played over the years is to enact revenue raisers as part of major bills, but provide these likely unpopular revenue raising provisions won’t take effect for many years. In the case of the Affordable Care Act, for example, the “Cadillac tax” on high cost medical plans was not scheduled to take effect until many years after the 2010 passage of the law.

An unstated assumption for such long delayed revenue raisers is that a later Congress will repeal the provision before it actually takes effect and begins to inflict pain. In the case of the Affordable Care Act, this implied agreement with future Congresses did eventually play out—that tax was never actually implemented.

This has the advantage of initially making the provisions in the original bill appear to have less of an overall impact on net federal spending. As the pain does not take place for years, there is less of a hue and cry about including this provision in lieu of making actual reductions in the cost of the package.

Then, years later, Congress can remove the provision once the only issue before the Congress is the pain this provision will create—a current pain that makes it easier to explain the need to incur the budget hit. Who knows, it might even help get those same Congressional members who voted for the first bill to now even get more credit for preventing these harms.

However, things aren’t going so well for this provision that raised revenue by forcing companies to capitalize and amortize research or experimental expenditures in what seemed at the time the “distant” future. The expected repeal has been introduced, but it was part of the Build Back Better Act which has stalled in Congress. For now, backers of the repeal have not been able to attach the provisions to a “must pass” bill, nor have they succeeded in getting both chambers to consider a “clean” bill.

In the interim, C corporations looking to prepare GAAP financial statements have been forced to start trying to figure out how the law would impact their tax provisions. As well, while it seems more likely than not that Congress will eventually restore immediate expensing (albeit, potentially retroactively sometime in 2023), that cannot be guaranteed if Congress deadlocks—the repeal could become a victim of partisan battles in Congress even if clear majority on both sides of the aisle claim passing this provision is a high priority.

The Post-TCJA IRC §174

The new IRC §174 begins with the following general rule:

(a) In general. In the case of a taxpayer's specified research or experimental expenditures for any taxable year —

(1) except as provided in paragraph (2), no deduction shall be allowed for such expenditures, and

(2) the taxpayer shall —

(A) charge such expenditures to capital account, and

(B) be allowed an amortization deduction of such expenditures ratably over the 5-year period (15-year period in the case of any specified research or experimental expenditures which are attributable to foreign research (within the meaning of section 41(d)(4)(F))) beginning with the midpoint of the taxable year in which such expenditures are paid or incurred.[2]

IRC §174(b) defines what are specified research or experimental expenditures, which is key to applying this provision:

(b) Specified research or experimental expenditures. For purposes of this section, the term “specified research or experimental expenditures” means, with respect to any taxable year, research or experimental expenditures which are paid or incurred by the taxpayer during such taxable year in connection with the taxpayer’s trade or business.[3]

Scope of the Guidance the AICPA is Requesting

The letter outlines those areas where the AICPA believes guidance is needed in the very near future. The letter reads:

Specifically, the AICPA requests guidance and provides recommendations in the following areas.

1. Identification of categories of section 174(a) expenditures.

Treasury and IRS should issue regulations providing that section 174(a) expenditures include direct costs, including employee compensation, contract labor, and materials, and, at the taxpayer's election, allocable indirect and overhead costs.
·Additionally, Treasury and IRS should issue regulations that illustrate, using detailed examples, which costs are “incident to” the development or improvement of a product as per Reg. § 1.174-2.

2. Issues that have arisen with regard to Rev. Proc. 2000-50.

IRS should modify the scope limitation under section 4 of Rev. Proc. 2000-50 to clarify that the limitation on costs that a taxpayer has treated as R&E expenditures under section 174 only applies to costs previously subject to an irrevocable election under section 174, including section 174(b) or charging the expenses to capital account.
Additionally, IRS should make a corresponding modification to the scope limitation under section 9.01(2) of Rev. Proc. 2022-14.[4]

The AICPA describes the background that leads to the need for this updated guidance:

Pre-TCJA, section 174 provided taxpayers with the option to immediately expense R&E expenditures under section 174(a) or elect to defer and amortize the expenditures over a period of not less than 60 months under section 174(b), or charge the expenditures to capital account under Reg. § 1.174-1. In addition, taxpayers could elect under section 59(e) to amortize over 10 years expenditures otherwise allowed as a deduction under section 174(a). Prior to the changes, taxpayers that paid or incurred costs for software development could rely on Rev. Proc. 2000-50, which allowed taxpayers to treat software development costs in the same manner as under section 174, including the same options (other than charging to capital account), whether the expenditures met the requirements of section 174 or not.

In addition to mandatory capitalization of R&E expenditures, the TCJA changed the language in section 174 from “research or experimental expenditures” to “specified research or experimental expenditures,” and added a special rule under section 174(c)(3) that specifies that for purposes of section 174, any amount paid or incurred in connection with the development of any software is treated as a “specified research or experimental expenditure.” As a result, the TCJA effectively eliminates taxpayers’ ability to rely on Rev. Proc. 2000-50 to deduct software development expenditures in the year incurred.[5]

The AICPA breaks the letter down into two sections, the first looking for overall guidance on what constitutes various §174(a) expenditures and the second dealing with issues related to software expenditures arising due to Revenue Procedure 2000-50 and the post-TCJA IRC §174.

Identification of Categories of IRC §174(a) Expenditures

The AICPA begins by noting that a large number of taxpayers have no systems in place to identify research or experimental expenditures:

Many taxpayers that pay or incur section 174 expenditures may not have an established methodology to identify the appropriate amounts of these expenditures that are now subject to mandatory amortization because, prior to the TCJA, the tax accounting treatment of current expensing generally would have been allowable whether the expenses were deductible as ordinary and necessary trade or business expenditures under section 162(a) or R&E expenditures under section 174(a).[6]

An initial reaction some might have is that, wait a minute, a lot has been written about the IRC §41 research credit and can’t that serve to provide guidance. But the AICPA notes that while the §174 definitions are relevant to the research credit, more expenses are treated as §174 expenses than are those that can be used for IRC §41’s research credit:

Taxpayers with research activities conducted in the United States may claim a research credit under section 41 for increasing these activities. The amount of the section 41 research credit by statute is a function of several variables including the amount of expenditures paid or incurred by the taxpayer that meet the definition of section 174(a) expenses. Although meeting the definition of section 174 is generally considered a threshold requirement for the section 41 research credit, the pool of costs eligible for the credit has been clearly delineated to include only wages, supplies, rental or lease of computers, and contract research expenses.[7]

The letter goes on to discuss the limitations of the regulations under IRC §174:

In contrast to the requirements for the section 41 research credit, the regulations under Reg. § 1.174-2 do not clearly delineate the extent to which various categories of expenses, including direct and indirect costs, fall within the definition of research and experimental expenditures. Rather, the regulations focus on the nature of the activity to which the expenditures relate. The regulations further provide that the qualified activities must involve the elimination of uncertainty in the development or improvement of a product, including products to be used by the taxpayer in its trade or business, or held for sale, lease, or license. With respect to defining the categories of expenses that might fall within the scope of section 174, and thus the amortization requirement provided in the TCJA, the regulations provide a very general standard for identifying section 174 expenditures. Pursuant to the regulations, section 174 applies to all costs that are “incident to” the development or improvement of a product.

While the regulations do not explicitly define which costs are “incident to” the development or improvement of a product, they do provide that costs paid or incurred in the production of a product after the elimination of uncertainty do not qualify as section 174 expenditures. The regulations exclude certain expenditures from section 174 eligibility including ordinary testing for quality control, management studies, and advertising and promotions, amongst others. Additionally, interpretive guidance suggests that allocable indirect costs and overhead may be section 174 eligible.[8]

The AICPA letter then notes that while previously there was little need for such specific §174 guidance since all expenses were immediately deductible, that is no longer the case:

Up until the TCJA, due to the current expensing option and the explicit constraints on expenses eligible for the section 41 research credit, there has been far less of a need for detailed rules addressing which categories of costs must be allocated to R&E activities and the extent to which such costs are characterized as expenses subject to section 174 treatment. Indirect costs, including overhead and general and administrative costs are of particular concern for many taxpayers, as such costs may be properly allocable to many business activities. In light of the new mandatory amortization regime, there is a need for guidance that provides taxpayers with certainty and uniformity in the accounting for these costs, and that minimizes controversies over the categories of costs associated with R&E activities that are subject to amortization. Without such guidance, some taxpayers will interpret the rules to apply narrowly to direct costs, while others may apply a full-absorption costing method like the rules of section 263A.[9]

AICPA Recommendations on Section 174(a) Expenditures

The AICPA letter contains the following two recommendations to the IRS and Treasury:

The AICPA recommends that Treasury and IRS issue regulations providing that section 174(a) expenditures include direct costs, including employee compensation, contract labor, and materials, and, at the taxpayer’s election, allocable indirect and overhead costs.
Additionally, the AICPA recommends that Treasury and IRS issue regulations that illustrate, using detailed examples, which costs are “incident to” the development or improvement of a product as per Reg. § 1.174-2.[10]

A key concern of the AICPA relates to how broadly the IRS might cast the net to bring in indirect expenses to be part of the amortization rules. For this reason, the AICPA argues Congress did not intend for §174 to include expenses broadly in the way that IRC §263A brings expenses into inventory:

In contrast to section 174, the uniform capitalization rules of section 263A provide a requirement to capitalize all direct and indirect costs that directly benefit or are incurred by reason of the production or resale of specified categories of property. In enacting section 263A, Congress provided very detailed rules in the legislative history as to which categories of direct and indirect costs would be subject to capitalization under section 263A. Further, the regulations follow this mandate and provide very detailed rules with a high degree of specificity as to which categories of direct and indirect costs, including overhead and service costs, are required to be allocated to activities and capitalized to property subject to section 263A. The types of activities subject to section 263A are activities for which the capitalization of direct costs, and in some cases certain types of indirect costs, were required to be capitalized under pre-section 263A law. The enactment of section 263A represents a congressional intent to establish more uniform rules for the identification and treatment of indirect costs with respect to tangible property.

Research and experimental expenses were considered a type of indirect cost associated with production of property, but by statute, preserving the current expensing option under section 174(a), this category of costs was explicitly excluded from the capitalization requirement of section 263A.[11]

The AICPA also points out that Treasury did not cast a broad §263A sized net in determining capitalization of intangible assets and benefits in response to the US Supreme Court’s INDOPCO[12] decision:

In 2003, in response to controversies that arose from the Supreme Court’s 1992 decision in the INDOPCO case, the IRS and Treasury issued final regulations to provide certainty as to the capitalization of costs with respect to intangible assets and benefits, including business acquisitions and restructurings. These regulations provide that taxpayers must capitalize amounts paid to acquire or create certain enumerated categories of intangible assets, and costs that facilitate the acquisition or creation of such intangible assets. In contrast to section 263A, these regulations explicitly provide that employee compensation, overhead, and certain de minimis costs are deemed not to facilitate the acquisition or creation of the enumerated intangibles and therefore are not required to be capitalized. Taxpayers may, however, elect to capitalize employee compensation, overhead, and de minimis costs with respect to such intangibles under the regulations.[13]

The letter argues that Congress has not looked to have expansive, full-absorption style costing rules apply to new IRC §174:

Amended section 174 takes away the option of current expensing under section 174(a). Many, if not most, taxpayers have relied on and consistently used the current expensing method for decades where they have had little need to apply a full-absorption regime. In amending section 174 to eliminate the current expensing option, and mandate amortization for all section 174(a) expenses, including all software development activities, Congress gave no indication that a switch to mandatory amortization should be subjected to a full-absorption regime such as the uniform capitalization regime under section 263A. To the contrary, as evidenced by the need to add a Code section to mandate a full-absorption type regime, it can be inferred that such a regime should be the subject of congressional action rather than administrative mandate. Further, the new mandatory amortization regime mirrors the prior elective amortization option under section 59(e) whereby, to our knowledge and experience relying upon the available guidance, taxpayers availing themselves of that election have never applied a full-absorption regime to allocate additional overhead and general and administrative costs to the pool of costs subject to the election. Similarly, under the former alternative election to either defer and amortize the costs under section 174(b) or charge the expenses to capital account, and which applied to all costs allocable to specific projects, the IRS has never sought to require taxpayers to apply a full-absorption methodology to the project costs subject to these elections. These elections have been in place for almost 70 years without any indication in our practical experience of such a requirement.[14]

The letter then returns to comparing Congress’ reasons for enacting IRC §263A as compared to the reasons for enacting IRC §174:

The legislative history leading up to the enactment of the uniform capitalization rules indicates a perception that congressional action was necessary to mandate full-absorption costing with respect to the various categories of properties subjected to those rules. As evidenced by the statutory language, regulations, and legislative history, imposing such a regime requires detailed and specific rules defining the categories of costs subject to capitalization, the categories of costs not subject to capitalization and methods of allocating costs to the appropriate property or cost objective. Congress gave no indication that in mandating that section 174 expenses be amortized rather than currently expensed, taxpayers would also be subject to a full-absorption costing regime like the one contained in section 263A. Further, given that section 263A treats section 174 expenses themselves as an indirect cost that are not required to be capitalized to property subject to section 263A, it would seem incongruous to then treat section 174 costs themselves as a direct cost that is burdened with indirect costs such as overhead and general and administrative costs. For these reasons, congressional action setting forth a specific requirement and detailed rules is necessary to require that taxpayers apply a full-absorption costing regime for purposes of defining the types and categories of costs that are classified as R&E costs under section 174(a).[15]

Thus, the AICPA concludes, the IRS and Treasury should provide guidance that limits the scope of costs mandated to be amortized under this rule:

In the absence of such an explicit requirement referencing more detailed rules, guidance should clarify that taxpayers are required to allocate direct costs, including wages, contractor costs, other direct labor costs, and materials and supplies, to the particular costs objective and are not required to allocate indirect costs such as overhead and general and administrative costs to such activity for purposes of identifying the amount of costs required to be amortized under section 174. At the same time, it would also provide a clear reflection of income to permit taxpayers on an elective basis to allocate overhead expenses for this purpose. This election could be patterned after the election Treasury and IRS adopted in 2003 under the intangibles regulations.[16]

Revenue Procedure 2000-50 Issues Under New §174

The second part of the letter deals with Revenue Procedure 2000-50 which provided guidance for software costs under the prior law. The letter begins by summarizing the procedure, as well as the restriction that it only applied to costs not subject to amortization:

Rev. Proc. 2000-50 provided guidance under prior law for the treatment of costs paid or incurred to develop, purchase, lease, or license computer software, and provides automatic consent for accounting method changes from one optional method to another. However, section 4 of Rev. Proc. 2000-50 explicitly states that this revenue procedure does not apply to any computer software that is subject to amortization as an “amortizable section 197 intangible” as defined in section 197(c) and the regulations thereunder, or to costs that a taxpayer has treated as a research and experimentation expenditure under section 174.[17]

The letter summarizes the provisions of the Revenue Procedure as follows:

Section 5 of Rev. Proc. 2000-50 provides that the costs of developing computer software (whether or not the particular computer software is patented or copyrighted) in many respects so closely resemble the kind of research and experimental expenditures that fall within the purview of section 174 as to warrant similar accounting treatment. Accordingly, the IRS will not disturb a taxpayer’s treatment of costs paid or incurred in developing software for any particular project, either for the taxpayer’s own use or to be held by the taxpayer for sale or lease to others, where:

All of the costs properly attributable to the development of software by the taxpayer are consistently treated as current expenses and deducted in full in accordance with rules similar to those applicable under section 174(a); or
All of the costs properly attributable to the development of software by the taxpayer are consistently treated as capital expenditures that are recoverable through deductions for ratable amortization, in accordance with rules similar to those provided by section 174(b) and the regulations thereunder, over a period of 60 months from the date of completion of the development or, in accordance with rules provided in section 167(f)(1) and the regulations thereunder, over 36 months from the date the software is placed in service.

Section 9.01 of Rev. Proc. 2022-14 provides the latest automatic method change procedures for a taxpayer that wants to change its method of accounting for the costs of computer software to a method described in Rev. Proc. 2000-50, including a taxpayer that wants to change its treatment of the costs of developing computer software to one of the methods described above (but only for software development costs incurred in taxable years for which the mandatory amortization rules under section 174 are not in effect). However, section 9.01(2) of Rev. Proc. 2022-14 similarly states that this change does not apply to any computer software that is subject to amortization as an “amortizable section 197 intangible” as defined in section 197(c) and the regulations thereunder, or to costs that a taxpayer has treated as R&E expenditures under section 174.[18]

The letter goes on to describe issues arising regarding the accounting method provisions in this area:

There has been longstanding uncertainty regarding whether taxpayers were deemed to have historically treated the costs of computer software as R&E expenditures under section 174 that would have precluded such taxpayers from changing their methods of accounting for the costs of computer software under the automatic change procedures of Rev. Proc. 2000-50 and Rev. Proc. 2022-14. In addition, while automatic change procedures are available for a change in the treatment of section 174 costs, a change in accounting method under section 174, must be implemented on a cutoff basis rather than with a section 481(a) adjustment like a change in accounting method under Rev. Proc 2000-50.[19]

AICPA Requested Change to Scope

The letter requests the following modifications to guidance in this area:

The AICPA recommends that the IRS modify the scope limitation under section 4 of Rev. Proc. 2000-50 to clarify that the limitation on costs that a taxpayer has treated as R&E expenditures under section 174 only applies to costs previously subject to an irrevocable election under section 174, including section 174(b) or charging the expenses to capital account.
Additionally, the AICPA recommends that the IRS makes a corresponding modification to the scope limitation under section 9.01(2) of Rev. Proc. 2022-14.[20]

The AICPA begins its analysis by looking at the history of Revenue Procedure 2000-50:

Section 162 allows a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business. Similarly, for tax years prior to 2022, section 174(a) allows for immediate expensing of R&E expenditures that are paid or incurred by a taxpayer during the taxable year in connection with its trade or business, although taxpayers may elect under section 174(b) to capitalize and amortize such costs ratably over a period of not less than 60 months. Regulation § 1.174-2(a)(1) defines R&E expenditures under section 174 as expenditures incurred in connection with the taxpayer's trade or business that represent research and development costs in the experimental or laboratory sense.

The IRS published Rev. Proc. 2000-50 to update, modify, and restate the guidelines for the treatment of the costs of computer software. Rev. Proc. 2000-50 provides separate rules for the costs of developing computer software, costs of acquired computer software, and leased or licensed computer software. As mentioned above, the guidance provides three allowable methods of accounting for software development costs (two of which are based on rules similar to those provided by section 174). These options were provided to eliminate controversy and reduce disputes with taxpayers.[21]

The AICPA describes uncertainty created by this guidance in certain situations:

The current guidance under Rev. Proc. 2000-50 does not apply to “costs that a taxpayer has treated as R&E expenditures under section 174.” However, this specific wording has generated much uncertainty regarding whether certain taxpayers can apply the guidance under Rev. Proc. 2000-50, as illustrated by the following examples:

Example 1: Taxpayer has historically treated various types of computer software costs (i.e., amounts paid or incurred to develop, purchase, lease, and/or license computer software) as immediate expenses. The taxpayer has now determined a method change is required under Rev. Proc. 2000-50 for the treatment of certain costs (e.g., the purchased software should be capitalized and amortized ratably over a period of 36 months in accordance with section 6.01(2) of Rev. Proc. 2000-50 and section 167(f)(1)).
Example 2: Taxpayer previously changed its method of accounting for the costs of developing computer software under section 5.01(1) of Rev. Proc. 2000-50 to treat as current expenses in accordance with rules similar to those applicable under section 174(a). The taxpayer has now decided to change its method of accounting for the costs of developing computer software to another method provided under section 5 of Rev. Proc. 2000-50 (e.g., capitalize and amortize ratably over a period of 36 months).[22]

The AICPA looks first at Example 1’s facts and issues that arise:

In example 1, the taxpayer historically treated the computer software costs as immediate expenses. However, has the taxpayer immediately expensed such costs as ordinary and necessary business expenses under section 162 or as R&E costs under section 174? If some of the costs actually meet the requirements of section 174 (e.g., resolving uncertainty) and others do not, would the statement only apply to the former or would it also apply if the taxpayer erroneously treated the expenses as section 174 costs? Based on this statement, could Rev. Proc. 2000-50 also be interpreted to apply only to software development expenses that do not in fact meet the requirements of section 174 (by virtue of the statement that the costs at issue “closely resemble” section 174 expenses, which creates an implication that the procedure might not apply to all software expenses but only the subset of software development expenses that do not in fact meet the requirements of section 174).

It may be impossible to distinguish whether an expense was deducted as an ordinary and necessary business expense under section 162 or as R&E costs under section 174 based on how the costs were reflected on the taxpayer’s federal income tax returns, and it would seem to defeat the purpose of Rev. Proc. 2000-50 to scope out of the method change any of the above situations. Furthermore, the guidance under Rev. Proc. 2000-50 was intended to simplify the accounting method treatment of computer software costs without burdening taxpayers from having to undertake an in-depth analysis to determine whether such costs are deductible as R&E expenditures under section 174. The results of such study would be highly subjective anyways given the lack of current guidance under section 174 with respect to computer software costs. In fact, the government previously issued proposed regulations under section 174 in 1983 (47 FR 2790) and 1989 (54 FR 21224) attempting to clarify the treatment of software development costs under section 174 only to withdraw those amendments to the regulations in 1993 (58 FR 15819) and instead lean on the administrative guidance contained in Rev. Proc. 69-21. See below excerpt from the preamble to the 1993 proposed regulations under section 174:

In Revenue Procedure 69-21, 1969-2 C.B. 303, the IRS announced that, as a matter of administrative practice, it would allow taxpayers to treat software development costs in a manner similar to the manner research or experimental expenditures are treated under section 174. The 1983 proposed regulation, however, would have provided additional conditions on the qualification of software development costs as research or experimental expenditures beyond those applicable to other products.

In the preamble to the 1989 proposed regulation, the IRS announced that it is studying the continuing validity of Rev. Proc. 69-21. The IRS has no present intention of changing its administrative position contained in Rev. Proc. 69-21, but it continues to study its viability. Taxpayers may continue to rely on Rev. Proc. 69-21. The amendments proposed in this document do not provide additional conditions applicable to computer software development costs. The IRS again invites comments on the proper tax accounting treatment of software development costs that do not qualify as research or experimental expenditures.

The AICPA does not believe it was the IRS’ intent to prohibit the taxpayer in example 1 from applying Rev. Proc. 2000-50 based on its present method of accounting. In fact, allowing this taxpayer to apply the guidance in Rev. Proc. 2000-50 would result in greater compliance with the Code. Therefore, the IRS should modify the scope limitations under section 4 of Rev. Proc. 2000-50 and section 9.01(2) of Rev. Proc. 2022-14 to clarify the limitation on costs that a taxpayer has treated as an R&E expenditure under section 174 only applies to costs that have been subject to an irrevocable election under section 174, including section 174(b) or charging the expenses to capital account.[23]

The letter concludes by giving the AICPA analysis of the second example:

In example 2, the taxpayer’s present method of accounting for software development costs is in accordance with section 5.01(1) of Rev. Proc. 2000-50, which is based on “rules similar to those applicable under section 174(a).” This language has led many taxpayers and practitioners to question whether the taxpayer’s present method would render them ineligible to make a subsequent change in method of accounting for software development costs under Rev. Proc. 2000-50.

As mentioned above, the guidance under section 5 of Rev. Proc. 2000-50 was provided to eliminate controversy and reduce disputes with taxpayers due to the uncertainty of the extent to which software development costs actually meet the definition of R&E expenditures under section 174. In fact, section 5.01 of Rev. Proc. 2000-50 indicates that the costs of developing computer software “in many respects so closely resemble the kind of R&E expenditures that fall within the purview of section 174 as to warrant similar accounting treatment.” Thus, the IRS seems to indicate that certain software development costs are not necessarily R&E costs under section 174 but should be afforded similar treatment. However, this guidance was intended to simplify the accounting method treatment of computer software costs without burdening taxpayers from having to undertake an in-depth analysis to determine which of their software development costs meet the classification criteria of section 174 requirements, and which do not.

The AICPA does not believe it was the IRS’ intent to prohibit the taxpayer in example 2 from making a subsequent change in method of accounting for software development costs under Rev. Proc. 2000-50 merely because it presently treats such costs as current expenses.[24]

[1] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022, https://us.aicpa.org/content/dam/aicpa/advocacy/tax/downloadabledocuments/56175896-aicpa-comment-letter-section-174-research-and-experimental-expenditures-final.pdf (retrieved June 3, 2022)

[2] IRC §174(a)

[3] IRC §174(b)

[4] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[5] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[6] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[7] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[8] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[9] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[10] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[11] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[12] INDOPCO, Inc. v. Commissioner, 503 U.S. 79 (1992)

[13] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[14] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[15] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[16] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[17] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[18] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[19] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[20] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[21] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[22] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[23] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022

[24] “Comments on Research & Experimental Expenditures under section 174,” Letter from AICPA Tax Executive Committee to Associate Chief Counsel Holly Porter, May 26, 2022