IRS TAM: Credit for Increasing Research Activities for Development of Business Components Guidance (IRC §41)

Certain research activities with respect to the development of a business component for an apparel retail company may be for a qualified purpose under I.R.C. §41(d)(3), the IRS National Office advised. Research activities with respect to the development of a business component may satisfy the process of experimentation test under §41(d)(1)(C) if the company undertook the activities for both qualified and non-qualified purposes under §41(d)(3), if substantially all of the research activities for the business component constitute elements of a process of experimentation for a qualified purpose described in §41(d)(3)(A). [TAM 202317015]