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April 12, 2023

IRS obsoletes guidance that allowed refund claims/amended returns to deduct certain R&E expenditures

In Revenue Ruling 2023-8, the IRS obsoletes an old ruling (Revenue Ruling 58-74) that allowed taxpayers to file refund claims or amended returns to deduct research and experimental (R&E) expenditures that they'd failed to deduct in prior years and for which the expense method form under former IRC Section 174(a) applied.

For taxpayers who had relied on Revenue Ruling 58-74, the new guidance provides transition relief in the form of "a reasonable time" to file refund claims, amended returns, or administrative adjustment requests.

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor