Draft Form 6765 Instructions Detail Additional Information Required for Filing Amended Tax Returns to Claim Research & Development Credits

The IRS recently released updated draft Form 6765 instructions, the form governed by IRC Section 41, Credit for Increasing Research Activities. The draft specifies rules outlined in FAA20214101F, which clarifies additional information taxpayers must provide for a valid claim under Section 41 on an amended return or administrative adjustment request (AAR) for Bipartisan Budget Act partnerships.

Within the draft instructions, the IRS outlines five specific items required for taxpayers filing an amended return to claim an R&D credit not reported on an originally filed return or to increase the amount reported on an original return.

The five items required items as listed by the IRS are:

• The “Business Components” (Defined in Section 41) for which the research credit claim relates.
• All research activities performed for each Business Component.
• The individuals who performed each research activity. A taxpayer may instead identify the individuals who performed each research activity by listing the individual's title or position.
• The technical information each individual sought to discover.
• The total qualified employee wage expenses, total qualified supply expenses and total qualified contract expenses paid or incurred for the credit claim. Completing Form 6765 is considered to meet this requirement.

Additionally, the draft instructions state that BBA partnerships are not permitted to file amended returns and must instead file an AAR.