March 30, 2021
Clothing designer cannot claim research credit for amounts spent to design clothes, Tax Court holds
In Leon Max v. Commissioner, T.C. Memo. 2021-37, the Tax Court has held that amounts a clothing designer spends to turn an idea into a garment — from sketching the design to creating patterns and samples — may not be claimed as research credits under IRC Section 411, concluding that the design process does not constitute qualified research. A Tax Alert is forthcoming.