Amended returns after the 2025 research expensing changes

1Summary

In July 2025 Congress changed how businesses deduct research costs. Public Law 119-21 added Section 174A to the Internal Revenue Code, which allows domestic research or experimental expenditures to be deducted in the year they are paid or incurred, for taxable years beginning after December 31, 2024.1 From 2022 to 2024 those costs had to be capitalized and amortized over five years.2 The same law changed how the research credit under Section 41 interacts with that deduction, and it gave eligible small businesses a one-year window to apply the new rule to earlier years by filing amended returns.1

The IRS set out the procedure in Revenue Procedure 2025-28. Elections made on amended returns had to be filed by July 6, 2026, or earlier where the ordinary period for a refund claim ran out first.2 An amended return of this kind is a claim for refund. Where it also claims a new or larger research credit, it must meet the IRS's specific information requirements for research credit refund claims.34

This paper explains the change, the routes back to earlier years, and where the research credit enters. It then considers the part contingent fees may play. Treasury's rule on contingent fees reaches amended returns and refund claims, but a federal court has enjoined its enforcement for refund claims filed before an examination.56 The paper sets out the case for success fees in this work fairly and answers it. Swanson Reed's position appears once, in a labeled box.

2What changed in 2025

2.1Research expenses from 2022 to 2024

For expenditures paid or incurred in taxable years beginning after December 31, 2021, Section 174 as amended by the Tax Cuts and Jobs Act required taxpayers to charge specified research or experimental expenditures to capital account. Domestic expenditures were amortized over five years and expenditures attributable to foreign research over fifteen years, in each case beginning at the midpoint of the taxable year in which they were paid or incurred.2

2.2Section 174A

Public Law 119-21 was enacted on July 4, 2025. Section 70302 of the Act added Section 174A, under which "there shall be allowed as a deduction any domestic research or experimental expenditures which are paid or incurred by the taxpayer during the taxable year".1 Domestic research or experimental expenditures are those paid or incurred in connection with the taxpayer's trade or business, other than expenditures attributable to foreign research.1 A taxpayer may instead elect to capitalize the expenditures and amortize them over a period of not less than 60 months.1 Amounts paid or incurred in connection with the development of software are treated as research or experimental expenditures.1 Foreign research expenditures remain under Section 174 and are still amortized over fifteen years.12

The new rule applies generally to amounts paid or incurred in taxable years beginning after December 31, 2024.1

2.3The link to the research credit

The research credit and the research deduction have always been connected. Section 70302 amended Section 41(d)(1)(A), so that qualified research now refers to research for which expenditures are treated as domestic research or experimental expenditures under Section 174A.1

It also rewrote Section 280C(c)(1). From taxable years beginning after December 31, 2024, the domestic research or experimental expenditures otherwise taken into account as a deduction or charged to capital account are reduced by the amount of the research credit allowed.1 A taxpayer may instead elect under Section 280C(c)(2) to take a reduced credit, and that election must be made by the due date of the return, including extensions, and is irrevocable.2 The IRS instructions for Form 6765 state that the reduced credit election "cannot be made or changed on an amended return".3 The Act states that the amendment to Section 280C(c)(1) creates no inference about how that section applied to earlier years.1

Period	Domestic research expenditures	Coordination with the research credit
Taxable years beginning before 2022	Deduction or elective amortization under Section 174 as then in force	Earlier Section 280C(c) rules
Taxable years beginning in 2022 to 2024	Capitalized and amortized over five years	Earlier Section 280C(c) rules, unless a small business made the retroactive election
Taxable years beginning after 2024	Deducted under Section 174A, or amortized over at least 60 months by election	Expenditures reduced by the credit, or reduced credit elected under Section 280C(c)(2)

Figure 1. Treatment of domestic research expenditures by period, from Public Law 119-21, section 70302, and Revenue Procedure 2025-28.12

3The routes back to earlier years

Section 70302(f) gives two transition rules. One is open to every taxpayer and works through the next return. The other is limited to small businesses and works through amended returns.1

3.1Accelerated recovery for every taxpayer

Any taxpayer with domestic research expenditures paid or incurred in taxable years beginning after December 31, 2021, and before January 1, 2025, that were charged to capital account may elect to deduct the remaining unamortized amount in full in the first taxable year beginning after December 31, 2024, or ratably over the two taxable years beginning with that year.12 The election is treated as a change in method of accounting made with the consent of the Secretary, applied on a cut-off basis.1 It is made going forward. It does not require amending the earlier returns.2

3.2The small business retroactive election

An eligible taxpayer may elect to apply Section 174A, and the new Section 280C(c) rule, to taxable years beginning after December 31, 2021, rather than December 31, 2024.1 The Act states that the taxpayer "shall file an amended return for each taxable year affected by such election".1

An eligible taxpayer is one, other than a tax shelter, that meets the gross receipts test of Section 448(c) for its first taxable year beginning after December 31, 2024.1 Revenue Procedure 2025-28 states that the test is met if average annual gross receipts for the three prior taxable years are $25,000,000 or less, adjusted for inflation, and that the inflation-adjusted amount for a taxable year beginning in 2025 is $31,000,000.2

The election is made by attaching a statement to an original, amended or administrative adjustment request return for each affected year. The statement must include declarations about tax shelter status and gross receipts, and say whether the taxpayer is deducting the expenditures or amortizing them over at least 60 months.2 Once made for one year, the election must be carried out for every affected year in which the taxpayer had domestic research expenditures.2 A taxpayer may instead implement the election as a change in method of accounting for its first affected year.12

3.3Late Section 280C elections and revocations

For eligible small businesses that make the retroactive election, the Act allows a Section 280C(c)(2) election, or a revocation of one, for any taxable year beginning after December 31, 2021, to be treated as timely if made on an amended return within one year after enactment.1 Revenue Procedure 2025-28 sets out how. A late election is made by adjusting the research credit on the amended return, adjusting the domestic research expenditures, and attaching an amended Form 6765 marked "FILED PURSUANT TO SECTION 4.03 OF REV. PROC. 2025-28".2 A revocation follows the same pattern under section 5.03 of the revenue procedure.2 A late election is irrevocable for that year, and a year for which an election has been revoked cannot later receive a late election.2

These elections change the amount of research credit on the amended return. They therefore put the research credit itself back in play for the years concerned.2

3.4The deadline

The Act required the small business election to be made no later than one year after enactment.1 Because July 4, 2026 fell on a Saturday, and July 3, 2026 was a legal holiday, Revenue Procedure 2025-28 set the deadline for both the retroactive election and the late Section 280C elections at Monday, July 6, 2026.2

The Act did not change the ordinary limitation period for refund claims.2 Under Section 6511(a), a claim for refund must be filed within three years from the time the return was filed or two years from the time the tax was paid, whichever is later.7 Revenue Procedure 2025-28 therefore states that for an affected year beginning in 2022, an amended return is timely only if filed by the earlier of July 6, 2026 and the end of the Section 6511 period. Its examples give dates of April 15, May 15 and July 6, 2026, depending on when the 2022 return was filed.2 The Taxpayer Advocate Service gave the same guidance in June 2026.8

The revenue procedure also gave an automatic six-month extension to file a superseding 2024 return for eligible taxpayers that had already filed for 2024 without the chance to make the election.2

Route	Who	How	Time limit
Deduct remaining unamortized 2022 to 2024 amounts in 2025, or over 2025 and 2026	Any taxpayer	Election on the return for the first taxable year beginning after 2024	That return
Apply Section 174A to taxable years beginning in 2022 to 2024	Eligible small businesses	Statement on amended returns or administrative adjustment requests, or a method change	July 6, 2026, or earlier under Section 6511
Late Section 280C(c)(2) election, or revocation	Eligible small businesses that made the retroactive election	Amended return with amended Form 6765	July 6, 2026, or earlier under Section 6511

Figure 2. Transition routes under section 70302(f) of Public Law 119-21, as implemented by Revenue Procedure 2025-28.12

4Where the research credit enters

4.1Research credit claims on amended returns

An amended return that changes the research credit is a claim for refund like any other. The IRS requires specific information with any refund claim involving the research credit, whether formal or informal.4 Since June 18, 2024, the required items at the time of filing are the business components to which the claim relates, the research activities performed for each component, and the total qualified wage, supply and contract research expenses for the year.4 The IRS has said it may later ask for the names of the individuals who did the research and the information each sought to discover if the claim is selected for examination.4

The requirement applies where the amended return includes a refund claim related to the research credit. It does not apply where the amended return claims no refund, or does not adjust the credit claimed on the original return.4 The Form 6765 instructions apply the procedure where an amended return includes a research credit that was not reported on the original return or that is increased from the amount originally reported.3

During a transition period that the IRS has extended through January 10, 2027, a taxpayer whose claim is deficient receives a letter and has 45 days to perfect it. If the information is not received or is insufficient, the entire claim is rejected.4 The IRS states that Appeals is not available for claims rejected as deficient or not processible.4 It says it will try to decide research credit refund claims within six months of receipt.4

Section G of Form 6765, which asks for information about each business component, is optional for tax years beginning before 2026. Column 49(f), however, applies to amended returns that claim a new or increased research credit.3

4.2The interaction with the deduction

The retroactive election and the late Section 280C elections change two things at once: the deduction for research expenditures and the credit. Under the rewritten Section 280C(c)(1), the deduction is reduced by the credit unless the reduced credit election is made.12 The Taxpayer Advocate Service told small businesses filing retroactively to review prior Forms 6765 and 3800 and their research deductions, amortization schedules and credit calculations.8 An amended return under these rules is therefore a recomputation of several connected items, in which a change to one figure moves the others.

4.3State returns follow

Federal amendments can carry into state returns. New Jersey's Division of Taxation states that a taxpayer that files an amended federal return changing the method or the amount of research credit claimed must file an amended New Jersey corporation business tax return, and that "If taxpayers amend their federal returns pursuant to IRS Rev. Proc. 2025-28, taxpayers must amend their New Jersey CBT returns."9 Texas's new franchise tax research credit, which applies to reports originally due on or after January 1, 2026, uses the qualified research expenses on line 48 of Form 6765. Where an amended Form 6765 is filed within the federal refund period, the Texas credit uses the amended figure, and where the IRS has audited the return, it uses the figure as audited or adjusted.10 A single federal amended return can therefore change more than one tax liability.

5What the record says about amended research credit claims

5.1The volume of claims

The IRS said in October 2021 that it receives thousands of research credit claims each year for credits in the hundreds of millions of dollars, and that these claims "are currently examined in a substantial number of cases and consume significant resources for both the IRS and taxpayers".11 No IRS publication found for this paper reports how many amended returns were filed under Revenue Procedure 2025-28, how many of them changed the research credit, or how they have fared.

5.2The experience of an earlier period

The most detailed official analysis of amended research credit claims is older. In 2009 the Government Accountability Office studied a panel of large corporations that included most of the largest credit claimants in 2003 and 2004.12 It found that amended claims had increased the credit claimed by between 1.5 and 5.4 percent a year for tax years 2000 to 2003, while changes recommended by IRS examiners would have reduced the credits claimed by between 16.5 and 27.1 percent a year in aggregate. For corporations whose credits were actually changed, the recommended reductions were between 19.6 and 36.6 percent.12 GAO noted that some of the examiners' recommendations were still open and could be appealed.12

GAO reported that IRS officials had been "particularly concerned with the quality of late or amended filings of credit claims", that the IRS had designated research credit claims a Tier I compliance issue in April 2007 because of the volume and difficulty of auditing them, and that officials said taxpayers in many cases settled "for 50 cents on the dollar as soon as IRS challenges a claim".12 GAO also recorded that most practitioners it interviewed acknowledged a proliferation of aggressive and sometimes sloppy claims, while pointing to legitimate reasons for filing on amended returns, including long-standing uncertainty in the regulations.12 These findings describe large corporations two decades ago. They are not evidence about the small businesses eligible for the 2025 election.

The IRS's 2008 audit techniques guide for research credit claims, which states that it is not an official pronouncement of the law or of the IRS's position, said that research credit refund claims were often filed at the end of an examination cycle and were usually based on a study prepared by an outside consultant under an engagement letter.13 It told examiners to obtain the engagement letter and, on contingency fees, said: "Some fee agreements shift ultimate control over the resolution of the claim to the preparer."13

5.3Treasury's stated concern

When Treasury adopted its current contingent fee rule in 2007, it said it was "concerned with the use of contingent fee arrangements in connection with claims for refund or amended returns filed late in the examination process", and that restricting contingent fees for returns "supports voluntary compliance with the Federal tax laws by discouraging return positions that exploit the audit selection process".14

5.4A different credit

In 2022 the IRS warned employers about third parties promoting improper employee retention credit claims, which are made on amended employment tax returns, and said such third parties "often charge large upfront fees or a fee that is contingent on the amount of the refund".15 That warning concerned a different credit and says nothing about research credit advisers. It shows that the IRS has treated fee structure as relevant when a refund can be claimed retroactively.

6The part contingent fees may play

6.1Why the federal fee rules reach so little of this work

Circular 230 provides that a practitioner may not charge a contingent fee for services rendered in connection with any matter before the IRS, and a matter before the IRS includes "preparing or filing or assisting in preparing or filing returns or claims for refund or credit".5 A contingent fee "includes a fee that is based on a percentage of the refund reported on a return".5 The rule permits a contingent fee for an amended return or refund claim only if it is filed within 120 days of a written notice of examination or challenge, and in a few other cases.5

On its face, then, the rule covers an amended return filed to make the 2025 elections. In 2014, however, a federal district court held that the IRS "lacks statutory authority to regulate the preparation and filing of Ordinary Refund Claims", which it defined as refund claims filed after the original return but before the IRS has begun an audit, and permanently enjoined enforcement of the contingent fee rule to that extent.6 The court relied on the D.C. Circuit's holding earlier that year that Treasury's authority over practice before it does not extend to regulating tax return preparers.16 Amended returns filed in 2025 and 2026 to apply Section 174A to earlier years are, in the ordinary case, refund claims filed before any examination.

The AICPA Code binds its members. It provides that a member in public practice shall not "Prepare an original or amended tax return or claim for a tax refund for a contingent fee for any client".17 Its example of a fee that is not permitted is a contingent fee for an amended return claiming a refund because a valid deduction was inadvertently omitted from the original.17 It permits a contingent fee where the member can show a reasonable expectation that a government agency will give the matter substantive consideration, and gives as an example an amended return claiming a refund greater than the threshold for review by the Joint Committee on Taxation.17 That threshold is $2,000,000, or $5,000,000 for a C corporation.18 A refund claim below that threshold does not fall within that example.

In December 2024 Treasury and the IRS proposed to replace the current rule with one that would make it disreputable conduct to charge a contingent fee "in connection with the preparation of an original or amended tax return or claim for refund or credit prepared prior to the examination of the tax return".19 They explained that "A practitioner with a direct, financial interest in the tax benefits of a client may be incentivized to increase such tax benefits."19 The proposal would still apply only to practitioners, and it has not been finalized.19

Congress also considered the question in 2025. The version of H.R. 1 passed by the House contained a section providing that "The Secretary of the Treasury may not regulate, prohibit, or restrict the use of a contingent fee in connection with tax returns, claims for refund, or documents in connection with tax returns or claims for refund prepared on behalf of a taxpayer."20 The text enacted as Public Law 119-21 does not contain that section.1

6.2The incentive in this setting

The 2025 change created a defined pool of refunds, available for a limited time, to a defined group of businesses. Each refund depends on the amount of domestic research expenditures and, where the credit is recomputed, on the research credit and the Section 280C choice.12 A fee calculated as a percentage of the refund rises with each of those amounts.

As an illustration only: if amended returns for 2022 to 2024 produce combined refunds of $200,000, a fee of 20 percent would be $40,000. If the same returns were prepared to produce $250,000, the same percentage would produce $50,000. The fee moves with the refund, not with the work.

Two features of this work give the incentive particular weight. First, the elections reopen the research credit for the years concerned, and the credit depends on judgments about business components, experimentation and the allocation of wages.24 Second, the deadline concentrated the work into a short period, ending on July 6, 2026 or earlier.2 Neither feature means that any adviser acted on the incentive. Many advisers who charge contingent fees may prepare such returns with care.

6.3Who bears the consequences

If a refund claim is excessive, the consequences fall first on the taxpayer. A person who makes a claim for refund of income tax for an excessive amount is liable for a penalty of 20 percent of the excessive amount unless the excess is due to reasonable cause.21 Interest runs on underpayments from the last date prescribed for payment.22 A preparer whose return or claim understates liability because of an unreasonable position may owe the greater of $1,000 or 50 percent of the income derived from it.23 No federal rule requires a contingent fee to be returned if a claim is reduced. Under Treasury's own definition, a promise to refund the fee if a position is not sustained is itself a contingent fee.5 Where state returns follow the federal figures, a federal adjustment can also lead to state amendments.910

7The case for success fees in this work

The arguments for contingent fees are strongest in a setting like this one, and they deserve to be stated fairly.

Awareness. Many small businesses may not have known that the law had changed, or that they could reach back to 2022. An adviser paid from the refund has a reason to find them and tell them.

Cash flow. The businesses eligible for the election are, by definition, smaller ones. Between 2022 and 2024 they had to amortize research costs over five years rather than deduct them.2 A business that paid more tax as a result may not be able to pay a fixed fee for amended returns before any refund arrives.

Risk sharing under a deadline. Amended returns for three years, with elections and statements, are real work.28 Under a contingent fee, the adviser bears the cost if the work produces little or nothing.

Value. The refund is the measure of what the business gains. A fee tied to it moves with that value, and supporters argue that this is a fair way to price work whose value cannot be known in advance.

Existing safeguards. Preparer penalties apply whatever the fee, and the IRS's information requirements for research credit refund claims apply whatever the fee.234

These are real considerations. Nothing in this paper suggests that advisers who prepared amended returns for a contingent fee acted improperly.

8Answering the case

Awareness and cash flow are arguments for low upfront cost and for advisers to tell businesses about the change. A fixed fee, a capped fee, or a fixed fee paid after the refund arrives can meet them. Treasury's definition of a contingent fee concerns how a fee is calculated, not when it is paid.5

Risk sharing. The risk a contingent fee shares is the risk that the work finds little. It does not share the risk that a refund is later reduced, with interest and a possible 20 percent penalty on the excessive amount.2122 That risk stays with the business.

Value. A fee tied to the refund claimed is tied to the amount claimed, not to the amount that survives examination. In the period GAO studied, examiners recommended reductions to research credits far larger than the increases claimed on amendment.12 The difference between those two amounts is where the interests of a business and its adviser can part.

Existing safeguards. The federal fee rule that was written for refund claims cannot be enforced against refund claims filed before an examination, and the professional code binds only its members.617 Penalties apply after the event. They do not address how the adviser's income was calculated.

Our position

Congress should prohibit contingent fees, commonly called success fees, in federal research and development tax credit engagements under Section 41, so that advisers are paid for the work they perform rather than for the size of the claim they produce. Swanson Reed, which publishes this paper, is a fixed-fee R&D tax adviser. It has a direct commercial interest in the outcome: it does not charge success fees, and a ban would remove a pricing model it competes against.

9What the record does and does not show

What the record shows:

Public Law 119-21 restored the deduction for domestic research expenditures from 2025 and let eligible small businesses apply it to 2022 to 2024 by amended return.1
The IRS set a deadline of July 6, 2026 for those elections, or earlier where the refund claim period ended first.2
Amended returns that claim a new or larger research credit must meet the IRS's information requirements for research credit refund claims.34
Treasury's contingent fee rule cannot be enforced against refund claims filed before an examination, and the 2024 proposal to respond has not been finalized.619
The consequences of an excessive claim fall on the taxpayer.2122

What the record does not show:

How many amended returns were filed under Revenue Procedure 2025-28, or how many changed the research credit.
How those returns were prepared, or how their preparers were paid.
How amended returns prepared under different fee arrangements fare on examination.

No IRS form asks how the preparer of an amended return was paid.3 Until that information is collected, the question of how contingent fees affected the claims filed after the 2025 change cannot be answered from official data.

References

Public Law 119-21, 139 Stat. 72, section 70302 (adding 26 U.S.C. 174A; amending sections 41(d)(1)(A), 174 and 280C(c)(1); subsections (c), (e) and (f)), approved July 4, 2025. https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm (accessed 11 October 2026). Back
Internal Revenue Service, Rev. Proc. 2025-28, Internal Revenue Bulletin 2025-38 (15 September 2025), sections 1, 2.02, 2.04, 2.05, 2.06, 2.08(8), 3, 4, 5 and 10. https://www.irs.gov/irb/2025-38_IRB (accessed 11 October 2026). Back
Internal Revenue Service, Instructions for Form 6765 (Rev. December 2025), "What's New", "Item A, Section 280C Election", "Section G, Business Component Information" and "Research Credit Claims on Amended Returns" (page last reviewed or updated 30 April 2026). https://www.irs.gov/instructions/i6765 (accessed 11 October 2026). Back
Internal Revenue Service, Research credit claims (Section 41) on amended returns frequently asked questions, introduction and questions 4, 5, 7, 15, 17 and 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
Treasury Department, Circular No. 230, 31 CFR 10.27, Fees, paragraphs (b) and (c). https://www.ecfr.gov/current/title-31/subtitle-A/part-10/subpart-B/section-10.27 (accessed 11 October 2026). Back
US District Court for the District of Columbia, Ridgely v. Lew, Civil Action No. 1:12-cv-00565 (CRC), Memorandum Opinion, 16 July 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
Office of the Law Revision Counsel, 26 U.S.C. 6511, Limitations on credit or refund, subsection (a), United States Code 2024 edition published by the Government Publishing Office. https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap66-subchapB-sec6511.htm (accessed 11 October 2026). Back
Taxpayer Advocate Service, Small businesses: Understand new research expense rules and a July 6 filing deadline (published 8 June 2026). https://www.taxpayeradvocate.irs.gov/news/tax-tips/small-businesses-understand-new-research-expense-rules-and-a-july-6-filing-deadline/2026/06/ (accessed 11 October 2026). Back
New Jersey Division of Taxation, The New Jersey Research and Development Tax Credit, Technical Bulletin TB-114(R) (revised 25 November 2025), pages 1 to 3. https://www.nj.gov/treasury/taxation/pdf/pubs/tb/tb114.pdf (accessed 11 October 2026). Back
Texas Legislature, S.B. 2206, 89th Legislature, Regular Session, enrolled version, section 1 (adding Tax Code sections 171.9202 and 171.9204) and section 6; and Texas Comptroller of Public Accounts, 2025 Legislative Update, "Franchise Tax Credit for Research and Development Expenses". https://capitol.texas.gov/tlodocs/89R/billtext/html/SB02206F.htm and https://comptroller.texas.gov/taxes/tax-policy-news/2025-august.php (accessed 11 October 2026). Back
Internal Revenue Service, IRS sets forth required information for a valid research credit claim for refund, News release IR-2021-203, 15 October 2021. https://www.irs.gov/newsroom/irs-sets-forth-required-information-for-a-valid-research-credit-claim-for-refund (accessed 11 October 2026). Back
US Government Accountability Office, Tax Policy: The Research Tax Credit's Design and Administration Can Be Improved, GAO-10-136 (November 2009), pages 2, 14 to 15 (with footnotes 18 and 19) and 32. https://www.gao.gov/assets/gao-10-136.pdf (accessed 11 October 2026). Back
Internal Revenue Service, Large and Mid Size Business Division, Research Credit Claims Audit Techniques Guide (RCCATG): Credit for Increasing Research Activities Section 41, LMSB-04-0508-030 (May 2008), introductory note, Chapter I "Background" and Chapter II, "The RC Claim Engagement Letter". https://www.irs.gov/businesses/research-credit-claims-audit-techniques-guide-rccatg-credit-for-increasing-research-activities-section-41 (accessed 11 October 2026). Back
Treasury Department and Internal Revenue Service, Regulations Governing Practice Before the Internal Revenue Service, final regulations, T.D. 9359, 72 FR 54540 (26 September 2007), preamble, "Contingent Fees", pages 54541 to 54542. https://www.federalregister.gov/documents/2007/09/26/E7-18918/regulations-governing-practice-before-the-internal-revenue-service (accessed 11 October 2026). Back
Internal Revenue Service, Employers: beware of third parties promoting improper employee retention credit claim, COVID Tax Tip 2022-170, 7 November 2022. https://www.irs.gov/newsroom/employers-beware-of-third-parties-promoting-improper-employee-retention-credit-claim (accessed 11 October 2026). Back
US Court of Appeals for the District of Columbia Circuit, Loving v. Internal Revenue Service, No. 13-5061, decided 11 February 2014, slip opinion pages 2 to 3 and 17 to 18. https://media.cadc.uscourts.gov/opinions/docs/2014/02/13-5061-1479431.pdf (accessed 11 October 2026). Back
American Institute of CPAs, AICPA Code of Professional Conduct (updated for all official releases through September 2026), ET 1.510.001 Contingent Fees Rule paragraphs .01 and .03, and ET 1.510.010 Tax Matters paragraphs .03 to .05. https://pub.aicpa.org/codeofconduct/ethicsresources/et-cod.pdf (accessed 11 October 2026). Back
26 U.S.C. 6405, Reports of refunds and credits, subsection (a), as reproduced by the Legal Information Institute, Cornell Law School (uscode.house.gov was under maintenance on the access date). https://www.law.cornell.edu/uscode/text/26/6405 (accessed 11 October 2026). Back
Treasury Department and Internal Revenue Service, Regulations Governing Practice Before the Internal Revenue Service, notice of proposed rulemaking, REG-116610-20, 89 FR 104915 (26 December 2024), Explanation of Provisions part B and proposed section 10.51(b). https://www.federalregister.gov/documents/2024/12/26/2024-29371/regulations-governing-practice-before-the-internal-revenue-service (accessed 11 October 2026; a Federal Register search on that date for documents with this title published from 1 December 2024 returned only this proposed rule). Back
U.S. House of Representatives, H.R. 1, 119th Congress, Engrossed in House, section 112208. https://www.govinfo.gov/content/pkg/BILLS-119hr1eh/html/BILLS-119hr1eh.htm (accessed 11 October 2026). Back
Office of the Law Revision Counsel, 26 U.S.C. 6676, Erroneous claim for refund or credit, subsection (a), United States Code 2024 edition published by the Government Publishing Office. https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap68-subchapB-partI-sec6676.htm (accessed 11 October 2026). Back
Office of the Law Revision Counsel, 26 U.S.C. 6601, Interest on underpayment, nonpayment, or extensions of time for payment, of tax, subsection (a), United States Code 2024 edition published by the Government Publishing Office. https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap67-subchapA-sec6601.htm (accessed 11 October 2026). Back
Office of the Law Revision Counsel, 26 U.S.C. 6694, Understatement of taxpayer's liability by tax return preparer, subsection (a), United States Code 2024 edition published by the Government Publishing Office. https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap68-subchapB-partI-sec6694.htm (accessed 11 October 2026). Back

Amended returns after the 2025 research expensing changes

Cite this paper

Summary

1Summary

2What changed in 2025

2.1Research expenses from 2022 to 2024

2.2Section 174A

2.3The link to the research credit

3The routes back to earlier years

3.1Accelerated recovery for every taxpayer

3.2The small business retroactive election

3.3Late Section 280C elections and revocations

3.4The deadline

4Where the research credit enters

4.1Research credit claims on amended returns

4.2The interaction with the deduction

4.3State returns follow

5What the record says about amended research credit claims

5.1The volume of claims

5.2The experience of an earlier period

5.3Treasury's stated concern

5.4A different credit

6The part contingent fees may play

6.1Why the federal fee rules reach so little of this work

6.2The incentive in this setting

6.3Who bears the consequences

7The case for success fees in this work

8Answering the case

9What the record does and does not show

References

About this paper

Cite this paper

Summary

1Summary

2What changed in 2025

2.1Research expenses from 2022 to 2024

2.2Section 174A

2.3The link to the research credit

3The routes back to earlier years

3.1Accelerated recovery for every taxpayer

3.2The small business retroactive election

3.3Late Section 280C elections and revocations

3.4The deadline

4Where the research credit enters

4.1Research credit claims on amended returns

4.2The interaction with the deduction

4.3State returns follow

5What the record says about amended research credit claims

5.1The volume of claims

5.2The experience of an earlier period

5.3Treasury's stated concern

5.4A different credit

6The part contingent fees may play

6.1Why the federal fee rules reach so little of this work

6.2The incentive in this setting

6.3Who bears the consequences

7The case for success fees in this work

8Answering the case

9What the record does and does not show

References

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