Fee disclosure on the claim | Research Credit Integrity Alliance

The problem

Businesses claim the federal research credit on IRS Form 6765, Credit for Increasing Research Activities.1 The form already asks for a good deal of information beyond the credit calculation. It asks whether the business elects the reduced credit under section 280C and whether it is a member of a controlled group.1 Its Section E asks for other information about the qualified research expenses claimed, including the total number of business components that generated them.2 Its Section G asks for information by business component; the instructions state that Section G is optional for tax years beginning before 2026 and required, subject to stated exceptions, for tax years beginning after 2025.2 For a refund or credit claimed on an amended return, the instructions state that the business must also provide specific information for the claim to be considered valid.2

The form does not ask whether a paid adviser prepared the credit calculation, or how that adviser was paid.1 The IRS can therefore see what was claimed, but not whether the claim was prepared under a fee that rises with the size of the credit.

Treasury's rules for practitioners already treat the fee basis as relevant to tax compliance. They define a contingent fee to include a fee based on a percentage of the refund reported on a return or of the taxes saved, and they restrict such fees across much of federal tax practice.3

The proposal

Our position

Form 6765 should ask every business claiming the research credit, on an original or an amended return, three short questions:

Did a person outside the business prepare or advise on the credit calculation for compensation?
If so, was any part of that person's fee calculated by reference to the amount of the credit, a refund, or tax saved?
If so, on what basis (for example, a percentage of the credit)?

The question is about the basis of the fee, not its amount. The answer would sit with the rest of the claim, where the IRS can use it in deciding which claims to review, and where the business itself confirms in writing how its adviser is paid.

Disclosure is not an alternative to our central position. Until Congress prohibits contingent fees in Section 41 engagements, it would show the IRS which claims were prepared under one.

Who would act

The IRS designs Form 6765 and its instructions, and the Internal Revenue Code requires every person who makes a return or statement to include the information required by the forms or regulations the Secretary of the Treasury prescribes.4 Treasury and the IRS could therefore add these questions through the normal process for revising the form.

Congress could also place the requirement in the statute, so that it does not depend on future form revisions. Either route is open; the proposal does not depend on which is used.

Expected effect

Our position

We expect three effects. First, the IRS would gain a simple data point for selecting and reviewing claims, at almost no cost to compliant filers. Second, every business would have to state, on a signed return, how its adviser is paid, which encourages it to ask the question before it signs an engagement letter. Third, aggregate answers would show, for the first time on an official basis, how common percentage fees are in research credit claims, which would inform the debate on our central position whichever way the evidence points.

Objections and response

"This adds paperwork for businesses that have done nothing wrong."

Our position

The burden is real but small: three questions, two of which are answered yes or no. The form already asks for detailed information by business component.2 Asking how the claim was prepared adds very little to that, and a business that prepares its own claim, or pays a fixed or hourly fee, would answer in seconds.

"Fee arrangements are commercially confidential." Advisers and their clients may not want pricing terms shared.

Our position

The proposal asks for the fee basis, not the amount or the identity of any adviser's other clients. Information on a return is confidential under federal law,5 and publication of statistics derived from it must not identify any taxpayer.6 The answer would be available to the IRS, not to competitors.

"The fee basis says nothing about whether a claim is correct." That is true of any single claim.

Our position

We agree that a percentage fee does not make a claim wrong. The proposal does not treat it as a finding. It treats the fee basis as one piece of context, alongside the many others the form already collects, and it lets the evidence on our wider position be tested with official data rather than argued from anecdote.

Sources

Internal Revenue Service, Form 6765, Credit for Increasing Research Activities (Rev. December 2024), page 1 (Items A and B) and pages 1 to 4 generally. https://www.irs.gov/pub/irs-pdf/f6765.pdf (accessed 11 October 2026). Back
Internal Revenue Service, Instructions for Form 6765 (Rev. December 2025), What's New (Section G); Section E, Line 37; Requirements To Complete Section G; Research Credit Claims on Amended Returns. https://www.irs.gov/instructions/i6765 (accessed 11 October 2026). Back
Treasury Department, Circular No. 230, 31 CFR § 10.27, Fees, § 10.27(b) and (c)(1). https://www.ecfr.gov/current/title-31/subtitle-A/part-10/section-10.27 (accessed 11 October 2026). Back
U.S. Government Publishing Office, United States Code, 2024 Edition, 26 U.S.C. § 6011, General requirement of return, statement, or list, § 6011(a). https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap61-subchapA-partII-subpartA-sec6011.htm (accessed 11 October 2026). Back
U.S. Government Publishing Office, United States Code, 2024 Edition, 26 U.S.C. § 6103, Confidentiality and disclosure of returns and return information, § 6103(a). https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap61-subchapB-sec6103.htm (accessed 11 October 2026). Back
U.S. Government Publishing Office, United States Code, 2024 Edition, 26 U.S.C. § 6108, Statistical publications and studies, § 6108(c). https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap61-subchapB-sec6108.htm (accessed 11 October 2026). Back

The problem

The proposal

Who would act

Expected effect

Objections and response

Sources

The other proposals