IRS requests feedback on draft Instructions for Form 6765, Credit for Increasing Research Activities

IR-2024-313, Dec. 20, 2024

WASHINGTON — The Internal Revenue Service today announced the release of draft Instructions for Form 6765, Credit for Increasing Research Activities PDF, also known as the research credit.

The IRS is seeking feedback regarding 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.” All feedback will be considered to ensure the tax year 2025 (processing year 2026) instructions provide clear and updated guidance on completing the form. The IRS remains committed to engaging with stakeholders in preparation for tax year 2025 (processing year 2026).

These instructions will be used in conjunction with revised draft Form 6765 released on Dec. 12, 2024 PDF, which includes a new Section E seeking other business information, a new Section F summarizing the qualified research expenses and a new Section G for reporting business component details. The IRS encourages taxpayers and their representatives to review and consider using the new format when preparing their tax year 2024 return.

The IRS anticipates publishing the final tax year 2024 Form 6765 and Instructions by the end of Jan. 2025.

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 (QSB) taxpayers, defined under section 41(h)(1) & (2) of the Internal Revenue Code who check the box to claim a reduced payroll tax credit; or
• Taxpayers with total qualified research expenses (QREs) 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 section 448(c)(3) (without regard to subparagraph (A) thereof), claiming a research credit on an original filed return.

The Form 6765 improvement effort was informed by stakeholder feedback. The IRS released an early preview of Form 6765 changes on Sept. 15, 2023, and invited comments from interested parties on the proposed changes. In response, the IRS received numerous helpful comments from various external stakeholders and revised the form as discussed in the prior news release on June 21, 2024.

Annually, the IRS receives thousands of returns claiming the research credit that involve hundreds of millions of dollars. There are a substantial number of cases examining research credit issues, which consume significant resources of both taxpayers and the IRS. Improvements to Form 6765 are intended to make tax reporting more consistent, improve the information received for tax administration and build an ongoing effort to manage resources in a more effective and efficient way.

For more information visit IRS.gov to learn more about Form 6765, Credit for Increasing Research Activities.