Introduction

In calculating the Research and Experimentation Tax Credit (hereinafter “RTC”) under I.R.C. § 41 and its corresponding treasury regulations, the consistency rules are a critical concept to understand in order to properly measure and compute the RTC and achieve a sustainable tax return filing position per Circular 230. In order to properly measure and compute the increase in qualified research and experimentation expenditures between the two periods measured to calculate the RTC, the consistency rule holds that the same standard must be applied in both periods. This critical concept was the focal point of a recent pivotal judicial interpretation handed down back in July of 2014 by the Fifth Circuit Court in Trinity Industries, Inc. v. United States. Read More