News: software

Final Regs Internal Use Software – R&D – What is the Dual Purpose Rule?

Final R&D tax credit regulations published by the Treasury on October 4, 2016 regarding internal use software introduce a new term, dual function software, as well as a safe harbor provision. Dual function software is “software developed for both internal …

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Year End Guidance – R&D Tax Credit Software Documentation

The general rule for R&D tax credit documentation is found under IRC 6001 – a taxpayer must retain documentation in usable form to substantiate (in this case the R&D tax credit), and IRS typically wants to see evidence of the …

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New Long Awaited R&D Credit Regs on Internal Use Software

These important new proposed regulations issued last week on the R&D tax credit affect what is known as internal use software or IUS which has been debated since Congress distinguished internal use software from other software back in 1986. Over …

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Section 199 – Online Software Ruling – Domestic Manufacturing Deduction

The IRS has recently ruled in GLAM – General Legal Advice Memorandum 2014-008 that a banking taxpayer who provides an app to access a customer’s bank accounts did not meet the exceptions to the Section 199 Domestic Production Activities Deduction …

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Online Software Regs – Section 199 Domestic Production Deduction – Taxpayer must show substantially identical software

Under existing IRS regulations on Section 199, the Domestic Production Deduction, software qualifies for 199 treatment, but online software may or may not depending upon whether certain exceptions are met. As with other qualifying domestic production property under section 199, …

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Section 199 – Online Software – New CCA IRS Guidance

This week the IRS released a new Chief Counsel Advisory Opinion (CCA) regarding Online Software and Section 199. The key issue was applying the exception for software that is ‘substantially identical’ available from third parties via download or shrink-wrap. Thus, …

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