This course provides an in-depth analysis of the legislative & judicial framework surrounding Section 174, focusing on the implications for manufacturing and engineer-to-order companies. Attendees will learn about the tax treatments available for R&D costs, the specific challenges manufacturing and engineer-to-order companies face under current tax law, and best practices for approaching Section 174. The presentation will explore current legislative stagnation and offer strategic compliance and tax planning recommendations. Common misconceptions/mistakes that have long-term negative consequences for the taxpayer are addressed so they can be avoided. By evaluating case studies and legislative text, participants will better understand how these changes affect R&D taxation and, most importantly, be pleased to learn that 174 does not affect engineering performed under contract. In all, once Section 174 is correctly applied, it is unlikely that a company performing R&D would be in financial peril due to 174. 

Learning Objectives:

• Describe the current legislative & judicial environment as it applies to the application of Section 174 and prepare for potential changes that could affect Section 174


• Identify the distinctions between R&D performed under contract, which qualifies as COGS, and internal R&D, which must be amortized under Section 174


• Examine the common 174 mistakes and misconceptions that appear to keep the client safe when an examination of the situation reveals the taxpayer would be in a precarious position


• Recommend how to protect clients from penalties through proper disclosure and adherence to best practices in R&D reporting

NASBA Approved

CPAacademy.org (Sponsor Id#: 111889) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

CPAacademy.org 1685 S. Colorado Blvd, Suite #205, Denver, CO 80222

EA Approved

CPAacademy.org (Sponsor Id#: HURS9) has entered into an agreement with the Internal Revenue Service, to meet the requirements of 31 Code of Federal Regulations, section 10.6(g), covering maintenance of attendance records, retention of program outlines, qualifications of instructors, and length of class hours. This agreement does not constitute an endorsement by the IRS as to the quality of the program or its contribution to the professional competence of the enrolled individual. Credit earned by attendees with a PTIN will be reported directly to the IRS as required of all providers. To ensure your CPE hours are reported, update your profile in My Account to include your PTIN number. Please note: IRS CE is only mandatory for EAs and ERPAs. For all other tax return preparers, CE is voluntary.

CPAacademy.org 1685 S. Colorado Blvd, Suite #205, Denver, CO 80222