IRC Section 174 interim Treasury and IRS guidance

The IRS has issued highly anticipated interim guidance (Notice 2023-63) on the amortization of specified research or experimental (SRE) expenditures under Section 174. In the notice, issued September 8, 2023, the IRS also announced its intent to issue proposed regulations consistent with the guidance in the notice. These forthcoming proposed regulations would apply to tax years ended after September 8, 2023. Taxpayers, however, may, with limited exception, rely on the rules in the interim guidance retroactively to tax years beginning after December 31, 2021.

Join our team of Ernst & Young LLP subject matter professionals for a discussion of the technical aspects, potential implications and uncertainties of the notice. On the webcast, we will address:

• Identifying, allocating, and amortizing SRE expenditures
• Determining whether certain activities constitute software development
• Determining whether costs paid or incurred for research performed under a contract are SRE expenditures
• Treatment of SRE expenditures if the related property is disposed of, retired or abandoned during the amortization period
•  Potential changes to current regulations under Sections 460 (long-term contracts) and 482 (cost-share arrangements)

Panelists

• Alexa Claybon, Principal, National Tax, Accounting Periods, Methods and Credits, Ernst & Young LLP
• Rayth Myers, Senior Manager, National Tax, Accounting Periods, Methods and Credits, Ernst & Young LLP
• Michael Bowes, EY Americas Transfer Pricing Advisory Leader and Partner, National Tax, Ernst & Young LLP
• Brian Peabody, Principal, National Tax, International Tax and Transaction Services, Ernst & Young LLP

Moderator

• Scott Mackay, Partner, National Tax Department, Accounting Periods, Methods & Credits, Ernst & Young LLP

EY webcast managed and produced by Ernst & Young LLP’s Tax Technical Knowledge Services Group, Washington, DC: Lynn Fairfax