According to a new IRS ruling, after July 31, 2023, businesses may no longer file refund claims or amended returns to deduct research or experimental expenses they failed to deduct in a prior year. The IRS’s reasoning is that Revenue Ruling 58-74 didn’t explain whether taxpayers consistently treated the costs of research and experimental expenses in determining their taxable income. That ruling also didn’t explain tax treatment deviations, for example, whether they were made due to a change of accounting method or an error correction. Rev. Rul. 2023-8 provides transition relief.
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