The Bottom Line
A recent Tax Court ruling in George v. Commissioner1 underscores the necessity of robust documentation and professional support when substantiating R&D credits.
George’s of Missouri, Inc. (GOMI) claimed large credits for increasing research activities (R&D credits) for 2012 through 2014, but in exam, the IRS denied the claims due to insufficient contemporaneous documentation of technical uncertainties and a process of experimentation. The Tax Court allowed only the projects where GOMI could provide contemporaneous documentation evidencing a process of experimentation was employed to overcome technical uncertainties. In addition, the Tax Court did sustain qualified research expenditure (QRE) claims for supplies while rejecting the need for wage QREs.
The Tax Court disallowed QREs related to projects where GOMI could not show experimentation occurred or produced contradictory evidence indicating that technical uncertainty was resolved before the start of the project. The Tax Court also ruled that GOMI had reasonable cause to rely on its service provider’s work and abated accuracy related penalties.
How We Can Help
George v. Commissioner illustrates the need for robust contemporaneous documentation and professional guidance for determining project qualifications and expense quantification related to R&D Credits. In the coming days, look for a follow-up article to this alert with additional details of the case and technical aspects of the ruling.
At Forvis Mazars, our nationwide team of engineers, accountants, and attorneys are ready to help you calculate, document, and substantiate your R&D credits. Reach out to a member of our team to learn more about how we can help.
- 1Gary C. George and Robin A. George v. Commissioner of Internal Revenue, T.C. Memo 2026-10, February 3, 2026.