On October 2, TEI submitted supplemental comments on Notice 2023-63 and Section 174, with a particular focus on rules related to software development for future proposed regulations. The comments address timing issues with respect to specified research and development expenditures on wages, the appropriate nexus for indirect costs to be considered SREs, and a reasonable analytical framework under Section 174. TEI also provided additional examples that would clarify which software-related costs need to be capitalized under Section 174.
The letter was a joint effort between the IRS Administrative Affairs Committee, chaired by Brian Kaufman, and the Federal Tax Committee, chaired by Betty Mak. Read the comments here.
