AICPA Seeks Guidance on Small Business Domestic Research Tax Costs in H.R. 1

In a comment letter to the Internal Revenue Service (IRS) and Treasury, the American Institute of CPAs (AICPA) requested immediate guidance on enacted Section 174A, which relates to the treatment of domestic research and experimental expenditures. The guidance AICPA seeks would confirm that eligible small business taxpayers may immediately deduct 2024 domestic research costs on their originally filed 2024 federal income tax returns without being required to first capitalize those amounts and later amend their returns.

“This guidance benefits sound tax administration for impacted taxpayers, practitioners, and the IRS and we urge Treasury to act immediately to provide taxpayers with certainty and allow them to meet their tax obligations with minimal confusion,” said Reema Patel, Senior Manager, AICPA Tax Policy & Advocacy.