Article
Five signs your R&D tax credit claim might not withstand scrutiny
April 8, 2026 · Authored by Travis Riley
The R&D tax credit can be a valuable opportunity for companies with qualifying activities. But a polished presentation, short intake, or quick estimate is not the same thing as a supportable claim.
Section 41 is still a fact-driven area of tax law, and the taxpayer ultimately bears the burden of substantiating the claim. That is why companies should look closely at how the claim is being developed — and who is behind it.
In our experience, five warning signs show up again and again.
The takeaway is simple: a supportable claim is built on substance, not speed or polished messaging.
1. Prepackaged narratives in place of taxpayer-specific analysis
Templates have a place. Copy-and-paste conclusions do not. If the uncertainty discussion or technical memo could be reused for another taxpayer with only minor edits, the analysis probably isn’t grounded in the company’s actual facts. The IRS has raised concerns about prepackaged submissions for years.
The risk today is that it’s easier than ever to produce generic narratives using AI and automation that look customized at first glance.
2. Credits estimated before the facts are developed
An early range can be useful. But a number built mainly from revenue, headcount, or industry averages is still just a preliminary estimate. Once the facts are developed and the claimed costs are matched to the work actually performed, that number may come down materially — and in some cases there may be little or no supportable credit at all.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.