Treasury Addresses How R&D Move, Corporate Book Tax Interact (1)

The Treasury Department and the IRS issued much-asked-for relief to try to resolve a potential conflict between the corporate book-income tax and a big new tax break on research and development costs.

The move, in a notice (Notice 2026-7) released late Wednesday, is aimed at easing companies’ concerns that taking catch-up deductions on previous R&D costs they haven’t yet deducted could trigger the corporate alternative minimum tax and hurt the companies.

Companies are now allowed to take those catch-up deductions as part of a change in how R&D costs are treated that was included in the giant tax-and-spending law enacted ...