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Proposal 6 of 6

Our position

Data and reporting

The IRS should publish regular aggregate data on federal research credit claims, the reviews it carries out and the adjustments that result, so that the debate on how claims are prepared can rest on evidence.

These proposals are the position of Swanson Reed, the publisher of this site.

On this page
  1. The problem
  2. The proposal
  3. Who would act
  4. Expected effect
  5. Objections and response
  6. Sources

The problem

The Internal Revenue Code requires the Secretary of the Treasury to prepare and publish, not less than annually, statistics reasonably available on the operations of the internal revenue laws, including the amounts claimed or allowed as credits.1Source 1U.S. Government Publishing Office, United States Code, 2024 Edition, 26 U.S.C. § 6108, Statistical publications and studies, § 6108(a) and (c). https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap61-subchapB-sec6108.htm (accessed 11 October 2026). Published statistics must not identify any taxpayer, directly or indirectly.1Source 1U.S. Government Publishing Office, United States Code, 2024 Edition, 26 U.S.C. § 6108, Statistical publications and studies, § 6108(a) and (c). https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap61-subchapB-sec6108.htm (accessed 11 October 2026).

For the research credit, the IRS Statistics of Income program publishes a page of tables drawn from Form 6765, covering the number of corporate returns claiming the regular and alternative credits and the amounts reported on most lines of the form. The tables cover active corporations other than those filing Forms 1120S, 1120-REIT and 1120-RIC. On that page, the most recent table by industrial sector is for tax year 2014, and the other tables end at tax year 2013 or earlier.2Source 2Internal Revenue Service, Statistics of Income, SOI Tax Stats: Corporation research credit, introduction and table list (page last reviewed or updated 9 November 2025). https://www.irs.gov/statistics/soi-tax-stats-corporation-research-credit (accessed 11 October 2026).

Information about how research credit claims fare once filed appears mainly in occasional reports by oversight bodies. For example:

  • In 2009 the Government Accountability Office reported that research credit claims had been contentious, with disputes between the IRS and taxpayers over what qualifies as research expenses and over the documentation needed to support a claim, and that such disputes leave taxpayers uncertain about the credit they will receive.3Source 3U.S. Government Accountability Office, Tax Policy: The Research Tax Credit's Design and Administration Can Be Improved, GAO-10-136, published 6 November 2009, Highlights. https://www.gao.gov/products/gao-10-136 (accessed 11 October 2026).
  • In 2019 the Treasury Inspector General for Tax Administration recommended that the IRS add criteria to its risk tool to identify high-risk carryforward research credit claims.4Source 4Treasury Inspector General for Tax Administration, Billions of Dollars of Potentially Erroneous Carryforward Claims Are Still Not Being Addressed, Reference Number 2019-40-044, 28 August 2019, Highlights (What TIGTA Recommended). https://www.tigta.gov/sites/default/files/reports/2025-08/201940044fr.pdf (accessed 11 October 2026).
  • In April 2026 the Treasury Inspector General for Tax Administration reported that, as of June 2025, the IRS had received about 11,400 Forms 941 claiming $382 million of the qualified small business payroll tax credit for tax year 2023. That credit allows a qualified small business to use part of its research credit against payroll taxes. It found that 40 businesses with a payroll tax election on Form 6765 for tax year 2023 did not meet the gross receipts requirement, and that the IRS had allowed them $3.1 million in research credits against payroll taxes. The report also noted that most businesses that claim the payroll tax credit are eligible.5Source 5Treasury Inspector General for Tax Administration, Controls for the Qualified Small Business Payroll Tax Credit Were Updated, but Ineligible Taxpayers Continue to Receive the Credit, Report Number 2026-408-012, 15 April 2026, Highlights. https://www.tigta.gov/sites/default/files/reports/2026-04/2026408012fr.pdf (accessed 11 October 2026).

These reports are useful, but each answers a narrow question at one point in time. In preparing this page we did not find a regular official publication of the number of research credit claims reviewed by the IRS, the amounts adjusted, or the penalties assessed on those claims.

The proposal

Our position:

The IRS should publish, each year and in aggregate form, data on federal research credit claims under Section 41, including:

  1. The number and total amount of research credits claimed on original returns and on amended returns or refund claims, by size of business.
  2. The number of research credit claims examined or otherwise reviewed, and the number and total amount of adjustments.
  3. The number and amount of penalties assessed in connection with research credit claims, on taxpayers and on preparers.
  4. If proposal 1 is adopted, the share of claims prepared under a fee linked to the amount of the credit, and how adjustment rates compare across fee bases.

The tables already published from Form 6765 should be brought up to date and continued on a regular schedule.

Who would act

The IRS and Treasury can act now. The duty to publish statistics already exists in the Internal Revenue Code, and the IRS already publishes research credit tables through its Statistics of Income program.1Source 1U.S. Government Publishing Office, United States Code, 2024 Edition, 26 U.S.C. § 6108, Statistical publications and studies, § 6108(a) and (c). https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap61-subchapB-sec6108.htm (accessed 11 October 2026). 2Source 2Internal Revenue Service, Statistics of Income, SOI Tax Stats: Corporation research credit, introduction and table list (page last reviewed or updated 9 November 2025). https://www.irs.gov/statistics/soi-tax-stats-corporation-research-credit (accessed 11 October 2026). Congress could add a specific requirement for research credit compliance data, so that publication does not depend on administrative priorities from year to year.

Expected effect

Our position:

Congress, Treasury and the public would be able to see how research credit claims fare after filing, not only what is claimed. Businesses would have a factual basis for judging how claims are reviewed. The debate about fee structures, including our own position, could be tested against official data. If the data show that the fee basis makes no difference to outcomes, that is worth knowing too.

Objections and response

"Publishing compliance data could reveal taxpayer information." Small cells in a table can identify individual taxpayers.

Our position:

The law already requires that published statistics must not identify any taxpayer, directly or indirectly.1Source 1U.S. Government Publishing Office, United States Code, 2024 Edition, 26 U.S.C. § 6108, Statistical publications and studies, § 6108(a) and (c). https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap61-subchapB-sec6108.htm (accessed 11 October 2026). Data can be grouped, rounded or withheld where a cell is too small.

"This diverts IRS resources from enforcement." Statistics programs have a cost.

Our position:

Much of this information is created in the ordinary course of reviewing claims. Publishing it in aggregate is a modest cost compared with the value of the credit. Better information also helps the IRS direct its own review work, which is the purpose behind the 2019 recommendation on risk criteria.4Source 4Treasury Inspector General for Tax Administration, Billions of Dollars of Potentially Erroneous Carryforward Claims Are Still Not Being Addressed, Reference Number 2019-40-044, 28 August 2019, Highlights (What TIGTA Recommended). https://www.tigta.gov/sites/default/files/reports/2025-08/201940044fr.pdf (accessed 11 October 2026).

"Examination results are not representative, because the IRS selects claims it thinks are risky." Adjustment rates among examined claims will be higher than among all claims.

Our position:

That is a fair point about interpretation. The answer is to publish the data with a clear description of how claims were selected, rather than not to publish it.

Sources

  1. U.S. Government Publishing Office, United States Code, 2024 Edition, 26 U.S.C. § 6108, Statistical publications and studies, § 6108(a) and (c). https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap61-subchapB-sec6108.htm (accessed 11 October 2026).     Back
  2. Internal Revenue Service, Statistics of Income, SOI Tax Stats: Corporation research credit, introduction and table list (page last reviewed or updated 9 November 2025). https://www.irs.gov/statistics/soi-tax-stats-corporation-research-credit (accessed 11 October 2026).   Back
  3. U.S. Government Accountability Office, Tax Policy: The Research Tax Credit's Design and Administration Can Be Improved, GAO-10-136, published 6 November 2009, Highlights. https://www.gao.gov/products/gao-10-136 (accessed 11 October 2026).  Back
  4. Treasury Inspector General for Tax Administration, Billions of Dollars of Potentially Erroneous Carryforward Claims Are Still Not Being Addressed, Reference Number 2019-40-044, 28 August 2019, Highlights (What TIGTA Recommended). https://www.tigta.gov/sites/default/files/reports/2025-08/201940044fr.pdf (accessed 11 October 2026).   Back
  5. Treasury Inspector General for Tax Administration, Controls for the Qualified Small Business Payroll Tax Credit Were Updated, but Ineligible Taxpayers Continue to Receive the Credit, Report Number 2026-408-012, 15 April 2026, Highlights. https://www.tigta.gov/sites/default/files/reports/2026-04/2026408012fr.pdf (accessed 11 October 2026).  Back

The other proposals

  • Policy

    Fee disclosure on the claim

    When a business files a federal research credit claim, it should state how the person who prepared the claim was paid. Form 6765 is the natural place to ask.

  • Policy

    Limits on contingent fees for refund claims

    Congress should restore and extend, by statute, the restriction on contingent fees for amended returns and refund claims that include the federal research credit, as the first part of a full prohibition on contingent fees in Section 41 engagements.

  • Policy

    Preparer identification

    Every federal research credit claim should name the person who prepared the credit calculation and the person who reviewed its technical basis, not only the preparer who signs the return.

  • Policy

    Shared responsibility for overclaims

    When a research credit claim is excessive and the preparer knew or should have known it, the preparer's exposure should reflect the size of the overclaim, not only the fee earned.

  • Policy

    Professional standards for claim preparers

    Anyone who prepares a federal research credit claim for a fee should meet minimum standards of competence, diligence and conduct, whatever their professional background.