IRS Issues New Guidance on R&E Expenditures in Rev. Proc. 2025-28

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The IRS has released Revenue Procedure 2025-28, which provides updated procedures for taxpayers making certain elections related to domestic research and experimental (R&E) expenditures.

This guidance implements changes from the One Big Beautiful Bill Act (OBBBA) and affects how businesses handle R&E costs under Section 174 of the tax code. Key updates include:

  • Simplified procedures to change accounting methods for R&E expenditures.

  • Instructions for making elections to amortize domestic R&E expenditures paid or incurred in tax years beginning after December 31, 2024.

  • An automatic extension of time for certain 2024 tax returns, allowing superseding returns to be filed before September 15, 2025.

  • File an amended return or elect a change in accounting method on their 2025 return.

  • Make an election on your 2024 return, whether it has not yet been filed (due September 15 or October 15, 2025).

Taxpayers engaged in R&E should review these new rules to ensure compliance and to take advantage of the updated filing options. Reach out to your Hantzmon Wiebel team to explore your options.

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