IRS seeks feedback on draft 6765 instructions

Draft instructions for Form 6765, "Credit for Increasing Research Activities," a.k.a. the research credit, are available for comment.

The Internal Revenue Service is seeking feedback on the draft instructions but specifically about Section G reporting for controlled groups, ASC 730 Directive, Section G business component detail and statistical sampling. 

Feedback regarding the tax year 2024 draft or final instructions can be submitted to lbi.rt.team@irs.gov through June 30, 2025, using the subject line: "Instructions for Form 6765." Feedback will be considered to ensure the tax year 2025 (processing year 2026) instructions provide clear and updated guidance on completing the form.

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These instructions will be used in conjunction with the revised draft 6765 that was released on Dec. 12, which includes a new Section E seeking other business information, a new Section F summarizing qualified research expenses and a new Section G for reporting business component details. 

The IRS anticipates publishing the final tax year 2024 Form 6765 and Instructions by the end of January. 

Section G will be optional for all filers for tax year 2024 (processing year 2025). For tax year 2025 (processing year 2026) and beyond, Section G will be mandatory for all filers with optional reporting for: 

• Qualified small business taxpayers, defined under IRC Sec. 41(h)(1) and (2) who check the box to claim a reduced payroll tax credit; or,
• Taxpayers with total qualified research expenditures equal to or less than $1.5 million, determined at the control group level and equal to or less than $50 million of gross receipts, as determined under Sec. 448(c)(3) without regard to Subparagraph (A), claiming a research credit on an original filed return. 

The IRS released a preview of the Form 6765 changes on Sept. 15, 2023, received comments from various stakeholders, and revised the form.