AICPA is urging the Treasury Department and the IRS to provide guidance on the capitalization and amortization of domestic research and experimentation (R&E) under IRC Section 174A(c). In a letter dated February 19th, Cheri Freeh, chair of the AICPA Tax Executive Committee, highlighted conflicting language in Revenue Procedure 2025-28, which has led to varying interpretations of the election process. AICPA recommends that the IRS clarify that the election under Section 174A(c) should be applied on a project-by-project basis and provide a simplified methodology for determining when taxpayers first realize benefits from R&E expenditures. Reema Patel, senior manager for tax policy and advocacy at AICPA, said: “The AICPA strongly believes that allowing taxpayers to either make the election under Section 174A(c) on a project-by-project basis or on a taxable-year basis will appropriately balance flexibility with administrability.”
