Research Tax Credit: Taking Expenses for Depreciable Property

Research Tax Credit: Taking Expenses For Depreciable Property

The IRS exam function often raises a number of questions about the rules for claiming expenses for depreciable property for the research tax credit.  The recent TG Missouri Corporation v. Commissioner, 133 T.C. 13, provides much needed clarity in how to apply these rules.  Facts & Procedural History TG Misouri is in the trade or…

Deere & Company v. Commissioner: Foreign Branch Income is Gross Receipts for Research Tax Credit

Pilot Escort Driver Able To Deduct Mileage But Not Meals

In Deere & Company v. Commissioner, 133 T.C. No. 11, the U.S. Tax Court concluded that income from foreign branches must be included in the gross receipts in computing the research tax credit. Facts & Procedural History Deere & Company (“Deere”) was in the business of manufacturing, distributing, and financing a full line of agricultural…

FedEx Corporation v. United States: Taxpayer Can Pick & Choose Between Regulations

Fedex Corporation V. United States: Taxpayer Can Pick & Choose Between Regulations

In FedEx Corporation v. United States, Dkt. No. 08-2423, the U.S. District Court for the Western District of Tennessee concluded that FedEx could rely on the internal use software provisions in the 2001 Final Regulations and the taxpayer-favorable discovery test in the 2003 Final Regulations in computing its research tax credit. The taxpayer did not…

Standard for Research Activities for the R&D Tax Credit

Standard For Research Activities For The R&d Tax Credit

In United States v. McFerrin, 570 F.3d 672, the Fifth Circuit Court of Appeals concluded that the trial court applied the wrong standard for determining what research is qualified and failed to estimate the amount of research expenses for the research tax credit. Facts & Procedural History Arthur R. McFerrin (“McFerrin”) is a prominent chemical…