Businesses with overseas research targeted by IRS expense rule
As research expenses under IRC Section 174 become subject to capitalization and amortization, businesses paying for research conducted outside of the United States could see an increase in taxable income. In Bloomberg Tax, Robert Piwonski, Caitlin Slezak, and Jay Woods discuss.

Under the new rule, taxpayers must capitalize and amortize Section 174 expenses over a five-year period for research conducted in the United States, or over a 15-year period for research conducted overseas. Many businesses need to review their expenditures to determine if costs they have deducted annually now qualify as “research and experimental expenditures” that must be capitalized and amortized for tax years beginning in 2022.