FAQs

The federal research credit is the credit for increasing research activities in Section 41 of the Internal Revenue Code.1Source 1United States Code, 26 U.S.C. § 41, Credit for increasing research activities, section heading and subsection (a) (2024 edition, U.S. Government Publishing Office). https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleA-chap1-subchapA-partIV-subpartD-sec41.htm (accessed 11 October 2026). A business that uses an outside adviser to prepare its claim may pay for the work performed, for example by a fixed fee or an hourly rate, or may agree a contingent fee. Treasury's rules on practice before the IRS define a contingent fee to include a fee based on a percentage of the refund reported on a return or a percentage of the taxes saved.2Source 2Treasury Department, Circular No. 230, 31 CFR § 10.27, Fees, paragraphs (b)(1), (c)(1) and (c)(2). https://www.ecfr.gov/current/title-31/subtitle-A/part-10/subpart-B/section-10.27 (accessed 11 October 2026). The debate is about whether a fee that rises with the size of the claim creates an incentive that federal law should remove.

Our position:

Congress should prohibit contingent (success) fees in federal R&D tax credit engagements under Section 41, so that advisers are paid for the work performed rather than the size of the claim. The argument is about the incentive the fee creates, not about the conduct of the people who charge it.

Sources

1. United States Code, 26 U.S.C. § 41, Credit for increasing research activities, section heading and subsection (a) (2024 edition, U.S. Government Publishing Office). https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleA-chap1-subchapA-partIV-subpartD-sec41.htm (accessed 11 October 2026).  Back
2. Treasury Department, Circular No. 230, 31 CFR § 10.27, Fees, paragraphs (b)(1), (c)(1) and (c)(2). https://www.ecfr.gov/current/title-31/subtitle-A/part-10/subpart-B/section-10.27 (accessed 11 October 2026).  Back

Under a contingent fee, what the business pays depends on the result. Circular 230 defines a contingent fee as a fee based, in whole or in part, on whether a position taken on a return or other filing avoids challenge by the IRS or is sustained, and says this includes a fee based on a percentage of the refund reported or of the taxes saved, or one that otherwise depends on the specific result attained.1Source 1Treasury Department, Circular No. 230, 31 CFR § 10.27, Fees, paragraphs (b)(1), (c)(1) and (c)(2). https://www.ecfr.gov/current/title-31/subtitle-A/part-10/subpart-B/section-10.27 (accessed 11 October 2026). The same definition also covers an arrangement in which the practitioner will reimburse all or part of the fee if the position is challenged or not sustained.1Source 1Treasury Department, Circular No. 230, 31 CFR § 10.27, Fees, paragraphs (b)(1), (c)(1) and (c)(2). https://www.ecfr.gov/current/title-31/subtitle-A/part-10/subpart-B/section-10.27 (accessed 11 October 2026).

As an illustration only, using round numbers: on a credit of $100,000, a fee of 20 percent of the credit would be $20,000. If the claim were $150,000 instead, the same percentage would produce a fee of $30,000. A fixed fee would be the same in both cases.

Sources

1. Treasury Department, Circular No. 230, 31 CFR § 10.27, Fees, paragraphs (b)(1), (c)(1) and (c)(2). https://www.ecfr.gov/current/title-31/subtitle-A/part-10/subpart-B/section-10.27 (accessed 11 October 2026).   Back

In part. Section 10.27 of Circular 230 says that, apart from listed exceptions, a practitioner may not charge a contingent fee for services rendered in connection with any matter before the IRS.1Source 1Treasury Department, Circular No. 230, 31 CFR § 10.27, Fees, paragraphs (b)(1), (c)(1) and (c)(2). https://www.ecfr.gov/current/title-31/subtitle-A/part-10/subpart-B/section-10.27 (accessed 11 October 2026). The regulation defines a matter before the IRS to include preparing or filing, or assisting in preparing or filing, returns or claims for refund or credit.1Source 1Treasury Department, Circular No. 230, 31 CFR § 10.27, Fees, paragraphs (b)(1), (c)(1) and (c)(2). https://www.ecfr.gov/current/title-31/subtitle-A/part-10/subpart-B/section-10.27 (accessed 11 October 2026).

In 2014 a federal district court held that the IRS lacked statutory authority to regulate the preparation and filing of what the court called "Ordinary Refund Claims", meaning refund claims filed after the original return but before the IRS has begun an audit of that return, and granted a permanent injunction against enforcing the regulation in that respect.2Source 2U.S. District Court for the District of Columbia, Ridgely v. Lew, No. 1:12-cv-00565 (CRC), Memorandum Opinion, ECF No. 48 (July 16, 2014), pages 1 and 14 to 15. https://www.govinfo.gov/content/pkg/USCOURTS-dcd-1_12-cv-00565/pdf/USCOURTS-dcd-1_12-cv-00565-1.pdf (accessed 11 October 2026). Our white paper on the rules on contingent fees in US tax practice looks at this in detail.

Sources

1. Treasury Department, Circular No. 230, 31 CFR § 10.27, Fees, paragraphs (b)(1), (c)(1) and (c)(2). https://www.ecfr.gov/current/title-31/subtitle-A/part-10/subpart-B/section-10.27 (accessed 11 October 2026).   Back
2. U.S. District Court for the District of Columbia, Ridgely v. Lew, No. 1:12-cv-00565 (CRC), Memorandum Opinion, ECF No. 48 (July 16, 2014), pages 1 and 14 to 15. https://www.govinfo.gov/content/pkg/USCOURTS-dcd-1_12-cv-00565/pdf/USCOURTS-dcd-1_12-cv-00565-1.pdf (accessed 11 October 2026).  Back

The Research Credit Integrity Alliance is an advocacy initiative of Swanson Reed. It is operated and funded by SR Tax Services LLC, a for-profit company that provides fixed-fee R&D tax advisory services under the Swanson Reed brand. It is the only firm behind the initiative.

Swanson Reed has a direct commercial interest. It does not charge success fees, and a ban would remove a pricing model it competes against. We state this openly so that readers can weigh the argument knowing who is making it. The full statement is on our conflicts of interest page.

No. Today the initiative is one firm, Swanson Reed. It has no members, partners or coalition. If others choose to support the legislative position, they will be listed only with their written consent, and support means support for the position and nothing more. Swanson Reed does not coordinate pricing with other firms.

The proposals are Swanson Reed's position on US federal policy. Their titles may change, so they are described here by topic. The full set is on the recommendations page, each with its own page.

Our position:

Our six US federal proposals cover:

• disclosure of the fee basis when a claim is filed;
• limits on contingent fees for amended returns and refund claims;
• identification of the preparer and the technical reviewer on every claim;
• shared responsibility for preparers where a claim they knew or should have known was inflated is disallowed;
• minimum professional standards for anyone preparing an R&D claim for a fee; and
• publication of aggregate data on claims, reviews and adjustments.

No. Our position is directed at the federal credit under Section 41. We take no position on state programs. Where the site describes state rules, it does so factually, with sources, and without recommendations.

The site keeps factual records of how R&D tax incentive claims are prepared and how advisers may be paid in the United States, the United Kingdom, Ireland, Canada and Singapore. These records help readers compare how different systems handle the same question. They state the rules with official sources and a "last reviewed" date. They contain no recommendations: our position concerns US federal law only, and we make no recommendations for any other country. Start with the jurisdictions overview.

IRS guidance says that, for a research credit claim for refund to be valid, the taxpayer must at a minimum identify all the business components to which the claim relates for that year; for each business component, identify all research activities performed, name the individuals who performed each activity and state the information each individual sought to discover; and provide the total qualified employee wage, supply and contract research expenses for the claim year, which may be done using Form 6765.1Source 1Internal Revenue Service, Required information for a valid research credit claim for refund (page last reviewed or updated 27 September 2026). https://www.irs.gov/businesses/required-information-for-a-valid-research-credit-claim-for-refund (accessed 11 October 2026). The IRS has said that, effective June 18, 2024, it waives the requirement to provide the names of the individuals and the information each sought to discover when the claim is filed, and may request that information if the claim is examined.2Source 2Internal Revenue Service, Research credit claims (Section 41) on amended returns frequently asked questions, introduction and FAQ 21 (page last reviewed or updated 1 October 2026). https://www.irs.gov/businesses/corporations/research-credit-claims-section-41-on-amended-returns-frequently-asked-questions (accessed 11 October 2026). The credit itself is claimed on Form 6765, Credit for Increasing Research Activities.3Source 3Internal Revenue Service, About Form 6765, Credit for Increasing Research Activities. https://www.irs.gov/forms-pubs/about-form-6765 (accessed 11 October 2026).

Sources

1. Internal Revenue Service, Required information for a valid research credit claim for refund (page last reviewed or updated 27 September 2026). https://www.irs.gov/businesses/required-information-for-a-valid-research-credit-claim-for-refund (accessed 11 October 2026).  Back
2. Internal Revenue Service, Research credit claims (Section 41) on amended returns frequently asked questions, introduction and FAQ 21 (page last reviewed or updated 1 October 2026). https://www.irs.gov/businesses/corporations/research-credit-claims-section-41-on-amended-returns-frequently-asked-questions (accessed 11 October 2026).  Back
3. Internal Revenue Service, About Form 6765, Credit for Increasing Research Activities. https://www.irs.gov/forms-pubs/about-form-6765 (accessed 11 October 2026).  Back

Every factual statement on the site carries a numbered citation to a primary source, such as a statute, a regulation, official guidance from a tax authority, a court record or an official report. Each claim is recorded in our facts register and checked against its source before a page is published. Anything not yet confirmed keeps the page in draft. Our methodology page sets out the full process.

Facts carry a numbered citation to their source. Swanson Reed's position appears only in boxes labeled "Our position", and only on pages about US federal policy. Country pages, comparisons and pages about state programs are factual only.

Email hello@researchcreditintegrity.org or use the contact form. Tell us the page, the statement and why you think it is wrong or unfair, with a source if you have one. Our corrections page explains how requests are reviewed and lists the corrections we have made.

Yes. You may quote our work with attribution to Swanson Reed and the Research Credit Integrity Alliance, and a link to the page. Each white paper and brief has a "Cite this paper" box with ready-made citations. See citing our work for formats.