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IRS Extends Comment Period on Form 6765: What It Means for R&D Claimants

Article

October 9, 2025

On October 1, 2025, the Internal Revenue Service (IRS) announced an extension of the comment period on the revised Form 6765 Credit for Increasing Research Activities through March 31, 2026. This decision gives taxpayers, tax professionals and industry stakeholders additional time to respond to the expanded disclosure requirements.

The draft instructions for Form 6765 significantly expand the type of data that taxpayers must provide, moving beyond quantitative calculations and requiring qualitative and structural reporting at the business component level.

These updates stress the importance of preparing now for a reporting regime that demands more granular project-level documentation and clearer substantiation of research activities.

Mandatory Reporting for the 2026 Tax Year

Expanded Section G – Business Component Information is required for most taxpayers (see exemptions):

Identifying the number and type of business components (product, process, software, etc.)
Descriptions of the information sought and uncertainties addressed
Allocation of QREs by category (wages, supplies, contract research, cloud computing)
Role-based wage allocation (direct research, supervision, support)

Section E and Section F disclosures are also mandatory, covering additional background and summary reporting of QREs
The IRS has made clear that Sections E, F and G are expected to be consistently reported in 2026 and beyond, reflecting a permanent shift toward project-level substantiation
For the 2025 tax year, Section G remains optional. Sections E and F are still required

Exemptions

Certain taxpayers may always omit Section G, including:

Qualified Small Businesses (QSBs) electing the payroll offset under Internal Revenue Code (IRC) Section 41(h)
Taxpayers with less than $1.5 million in total QREs (controlled group basis) and less than $50 million in gross receipts

45-day Grace Period

The IRS also extended the research credit claim transition period until January 10, 2027. Accordingly, taxpayers will continue to have 45 days to supplement credit refund claims that are not complete. This is especially important for taxpayers who filed for a refund toward the end of the statute of limitations period.

Strategic Takeaways for Taxpayers

1. Begin Building Component-level Granularity Now

Organize your research and development (R&D) project data by business component and begin mapping wage, supply and contractor expenses accordingly. Having this structure in place will help ensure readiness for 2025 filings.

2. Evaluate Exemption Thresholds

If your activities and gross receipts fall below the thresholds, you may qualify for reduced reporting. However, planning should still include tracking data at the business component level in case activity levels increase.

3. Treat 2025 as a Pilot Year

With Section G being optional for 2025, companies can use this year as a dry run to align internal data systems and assess readiness for the mandatory reporting in 2026.

4. Strengthen Documentation Processes

The revised Form 6765 requires narrative details that support the Four-Part Test. Taxpayers should move away from after-the-fact reconstructions and toward contemporaneous documentation of uncertainties, experimentation and outcomes.

Preparing for Enhanced Transparency: Navigating the Upcoming Changes To Form 6765 Reporting

The IRS’s extended comment period offers stakeholders more time to shape the final Form 6765 instructions, but the direction is clear: greater transparency and more detailed reporting will be required beginning in 2026. By taking steps now — piloting Section G reporting in 2025, organizing project-level data and leveraging technology — taxpayers can be ready for a smooth transition.

Your Guide Forward

Cherry Bekaert’s technology platform enhances our ability to help clients navigate the new Form 6765 environment. Our process provides:

Centralized project tracking that aligns with the IRS business component framework
Automated data collection from human resources, payroll and general ledger systems
Role-based dashboards that make wage allocations by activity and supervision more transparent
Document libraries that store contemporaneous technical notes, meeting minutes and test results

Together, Cherry Bekaert’s technical Tax Credits & Incentives Advisory professionals, with our technology-driven process, make compliance with the new reporting rules more efficient, defensible and less burdensome for taxpayers.

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