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September 8, 2023

BREAKING TAX NEWS | IRS issues much-anticipated interim guidance clarifying the application of IRC Section 174 to specified research or experimental expenditures

The IRS has issued highly anticipated interim guidance (Notice 2023-63) on the amortization of specified research or experimental (SRE) expenditures under IRC Section 174 and announced its intent to issue proposed regulations consistent with the guidance in the notice. The guidance also covers the treatment of SRE expenditures under IRC Section 460, as well as the application of IRC Section 482 to cost-sharing arrangements that involve SRE expenditures. The interim guidance is not currently applicable, but states that the forthcoming proposed regulations would apply for tax years ended after September 8, 2023. Taxpayers, however, may rely on the interim guidance retroactively to tax years beginning after December 31, 2021.

A Tax Alert is forthcoming. A webcast on the interim guidance is scheduled for October 3, 2023, at 1 p.m. EST. Registration for the webcast will be available at a later date.

Published by NTD’s Tax Technical Knowledge Services group; Jennifer A Brittenham, legal editor