The IRS Large Business and International (LB&I) operating division recently announced a new enforcement campaign focused on research and development (R&D) credit activities under IRC Sections 41 and 174. This addition is a continuation of LB&I’s use of campaigns to better focus its examinations and other compliance resources.
The goal of the R&D credit campaign is to promote voluntary compliance, focus resources on the highest-risk research issues, and increase consistency of examinations. As part of the campaign, LB&I will employ a variety of strategies for enforcement including issue-based examinations, form updates, and requests for guidance.
LB&I has stated that it will use issues identified in the campaigns as part of its examination selection criteria. Therefore, the addition of the R&D credit to the campaign list could indicate that taxpayers claiming R&D credits will have an increased likelihood of being selected for audit.