IRS Obsoletes R&D Ruling From 1950s as Amortization Takes Effect

The IRS on Wednesday obsoleted a decades-old ruling from the 1950s that allowed companies to file an amended tax claim for years they didn’t expense their research and development costs, if they chose to use this method of accounting.

The agency released Revenue Ruling 2023-8, obsoleting Rev. Rul. 58-74 because “there are insufficient facts in the ruling to properly analyze whether the taxpayer’s failure to deduct certain research or experimental expenditures such as the cost of obtaining a patent, when it deducted other research or experimental expenditures, constituted a method of accounting or an error.”

The ...