IRS Will No Longer Challenge R&D Credits Claimed on Clinical Trials Stages 1 and 2, if…

December 19, 2012

By Michael Hadjiloucas

The Internal Revenue Service has issued guidance on December 7th (LB&I – 04-1212-014) to its examiners that would provide more flexibility in allowing the research and development tax credit for taxpayers working to develop new drugs, in a development viewed as taxpayer-favorable by the industry and accounting firms.

Examiners should not challenge the amount of certain qualified research expenses (QREs) taken by taxpayers for developing new pharmaceutical drugs and therapeutic biologies if those expenses occur during Stage 1 and Stage 2 of a specific four-stage development process and taxpayers provide signed certifications of their research.

About Michael Hadjiloucas

Michael Hadjiloucas has expertise in both domestic and international corporate tax, entity formation, acquisitions, reorganization and due diligence, and partnership transactions, inbound and outbound transactions, and taxation of foreign entities.