iTaxBlog: R&D
Regulations for Electing the ASC Clarified by Treasury and IRS
On June 10, 2011, the Treasury and IRS published final and temporary regulations in the federal register relating to the election and calculation of the ASC under section 41(c)(5). These final regulations implement changes to the credit for increasing research activities under section 41 made by the Tax Relief and Health Care Act of 2006.
This guidance states a taxpayer is deemed to have requested, and to have been granted, the consent of the Commissioner to make or revoke an election if the taxpayer completes the portion of Form 6765, “Credit for Increasing Research Activities”, as appropriate, and attaches the completed form to the taxpayer's timely filed (including extensions) original return for the year to which it applies. An ASC election under section 41(c)(5) may not be made or revoked on an amended return.
Additionally, the final regulations generally require that short taxable years be prorated by the number of days in the year instead of the number of months in the year for taxable years ending after June 9, 2011. Recognizing that some taxpayers may have already filed returns using a monthly calculation for a short taxable year, the final regulations also provide that returns filed for taxable years ending within a specified time period may, at the taxpayer's option, be amended to reflect the daily calculation.
