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The R&D credit is sitting unclaimed in a meaningful portion of your existing client portfolio. That is not conjecture — fewer than 20% of eligible businesses claim it annually, and the eligible population includes manufacturers improving production processes, software companies building custom tools, food and beverage companies developing new formulations, and agricultural businesses running crop improvement programs. These are common clients for mid-sized CPA firms, and most of them have never been asked the qualifying question.
The more pointed question for firm owners is not whether the opportunity exists. It is whether your firm is structured to capture it. R&D credit work is high-margin advisory when it is done well. It is reputational exposure when it is done carelessly. The IRS has made this a priority examination area, and the documentation standard that separates a defensible credit from a disallowed one is not intuitive — it requires specialist knowledge that builds through repetition.
This blog examines the pros and cons of building R&D credit capabilities in-house, what the OBBBA changes mean for your clients right now, where the examination risk concentrates, and how firms at different stages are structuring this work.
The One Big Beautiful Bill Act signed July 2025 created two specific, time-sensitive opportunities for CPA firms with affected clients — on top of the baseline annual credit opportunity that already existed.
Under the TCJA, businesses were required to capitalize and amortize domestic R&D costs over five years starting with tax year 2022 — rather than deducting them in the year incurred. The OBBBA reversed this: Section 174A reinstates immediate expensing for domestic R&D costs for tax years beginning after December 31, 2024, and allows clients to deduct previously capitalized 2022-2024 costs either in full in 2025 or spread over 2025-2026.
For a client who spent $1.5 million per year on qualifying domestic R&D activities in 2022, 2023, and 2024, the unamortized portion of those costs is now deductible — potentially generating six-figure refunds through amended returns. That is a proactive call that should be happening with every affected client in your book right now. The three-year lookback window for 2022 amended returns is already narrowing.
Separately from the Section 174A deduction changes, the Section 41 credit continues to operate as a dollar-for-dollar tax reduction on qualifying research expenses. The interaction between the reinstated 174A deduction and the Section 41 credit requires careful planning under Section 280C(c) — which is itself an advisory conversation that turns a compliance engagement into a planning engagement.
Sources: Bloomberg Tax, R&D Tax Credits and Deductions Explained (Section 174A / OBBBA 2025), April 2026; Wipfli, New IRS Guidance on Accounting for R&D Tax Credits Under OBBBA, March 2026.
The R&D credit is one of the strongest arguments for adding a high-margin advisory service to an existing CPA practice. The reasons are specific.
A well-documented R&D credit study for a mid-sized manufacturer that identifies $200,000 in annual credits generates an advisory fee that reflects the value delivered — not the hourly rate on a tax return. Firms that do this work consistently report it as among the highest-margin engagements in their practice. And because the credit recurs annually, the engagement relationship recurs with it.
You already know which clients are in qualifying industries. You have their financials, their payroll data, their entity structures. The initial identification of potential qualifying activity does not require a cold call — it requires looking at what you already know and asking whether any of it meets the four-part IRS test. Your firm has the access. The question is whether you have the expertise to take the next step.
Specialist R&D credit firms actively prospect manufacturing, software, and food and beverage companies through cold outreach and industry associations. If your clients have qualifying activity and you have not raised the conversation, the door is open. A client who engages a credit specialist through another channel has introduced a competitor into your relationship — one who may not stop at the credit study.
Want to Offer R&D Tax Credit Studies to Your Clients Without Doing the Work In-House?
We work with CPA firms to identify, document, and deliver R&D credit claims — under your brand or ours, with a referral fee where it makes sense.
The R&D credit is also one of the IRS's highest-scrutiny areas. Firms that identify credits without the documentation infrastructure to defend them are not generating advisory revenue — they are generating future examination problems.
A valid R&D credit claim requires more than identifying qualifying activities. The IRS requires identification of all business components to which the claim relates, the specific research activities performed for each component, the individuals involved, and the total qualified expenses by category — wages, supplies, and contract research. For amended return claims, all of this must be provided when the claim is filed.
In 2019, the Tax Court disallowed over $235,000 in R&D credits for Siemer Milling Company because the company could not demonstrate that its manufacturing process activities met the process-of-experimentation requirement with sufficient specificity. The activities were real. The documentation was not defensible. The firm that assisted with the claim had a difficult conversation with a client whose anticipated refund did not materialize.
Source: Siemer Milling Company v. Commissioner, U.S. Tax Court, April 2019.
Determining whether a specific client activity meets the four-part IRS test — permitted purpose, technological in nature, elimination of uncertainty, process of experimentation — requires applying technical criteria to specific facts. Whether a manufacturing process improvement involved genuine technical uncertainty at project outset, or whether software development constitutes experimentation rather than routine coding, are judgment calls that require both tax expertise and industry pattern recognition.
Firms doing one or two credit studies per year make these calls from general tax knowledge. Specialist teams doing dozens of studies annually make them from experience across hundreds of similar activities in the same industries. The difference is not visible in the fee proposal. It shows up when the IRS opens an examination.
The IRS has updated its amended return claim requirements for Section 41. As of June 2024, firms must provide business component identification, research activity descriptions, individual titles or roles, and qualified expense totals at the time the amended claim is filed — not later in response to an examiner request. Form 6765 changes under consideration would add even more granular reporting requirements for business components.
Firms that have been identifying credits and preparing claims without this level of documentation specificity are not just exposed on current claims — they have potential lookback exposure on prior-year filings that used the same approach. The IRS is building institutional knowledge in this area faster than most general practices are.
Source: IRS Research Credit Claims on Amended Returns FAQ, June 2024 update.
Software platforms that assist with R&D credit identification and documentation have proliferated. They organize project data, track qualified expenses, and generate documentation templates. For teams with underlying specialist knowledge, these tools improve throughput. For teams without it, they produce documentation that looks complete without the substance that survives examination. The IRS evaluates the underlying activities — not the formatting of the workpapers.
Identifying the credit is the easy part. Defending the documentation under examination is where specialist depth separates a profitable practice from a liability.
The decision framework for R&D credit work is similar to the one that applies to EBP audits and nonprofit Single Audits: the firms best positioned to do this work defensibly are the ones doing it at volume. For firms that want to surface the opportunity for clients without taking on the examination exposure of in-house studies, a structured partner arrangement is the cleaner answer.
MYCPE ONE has been working with CPA and accounting firms for over 10 years. 200+ partner firms, 3,000+ professionals across 40+ offices in two countries, 10,000+ clients supported. The R&D credit practice within that network produces claims built to survive examination — not just claims that exist.
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MYCPE ONE supports CPA firms with R&D credit studies — you stay the client's advisor, our specialist team does the study work.
The R&D credit is a high-value advisory opportunity sitting in your existing client base. The OBBBA's Section 174A changes have added a specific, time-limited amendment window on top of the baseline annual credit — making this an unusually productive moment for proactive client outreach.
The question for CPA firm owners is the same one that applies to any high-margin, examination-sensitive service: do you have the specialist depth to do this defensibly in-house, and is the volume there to justify building it? If yes, build it. If not, the right answer is not to skip the conversation with the client — it is to have the conversation and refer the study work to a team built to do it correctly.
Your client should get the credit. Whether your firm does the study or a specialist does is a secondary question. What matters is that someone gets there before the IRS closes the window or a competitor opens the door.
Start with industry. Manufacturing, software development, food and beverage, agriculture, construction, and engineering consistently produce qualifying activities. The initial screen is a conversation about whether any of the client's product or process development work involved technical uncertainty at the outset — that is the first filter. You do not need a study to have that conversation.
Section 174A allows clients who capitalized domestic R&D costs for 2022-2024 under TCJA amortization rules to deduct those costs in 2025, or spread them over 2025-2026. This requires amended returns for 2022-2024. The 2022 three-year lookback window is already narrowing. Any client with material R&D spend in those years is a candidate for an immediate amended return conversation.
The IRS requires business component identification, research activity descriptions, individual titles involved, and qualified expense totals. For amended claims, all of this must be provided with the claim filing — not later. Firms that filed claims without this documentation level should evaluate their exposure on existing filings before filing additional claims.
If the credit is disallowed and the IRS determines the position was not reasonable, the accuracy-related penalty is 20% of the underpayment. If the IRS characterizes it as a gross valuation misstatement, the penalty increases to 40%. The threshold for avoiding the penalty is that the position had substantial authority and was adequately disclosed.
In a white-label model, the client sees no change — the study is delivered under your firm's brand. In a referral model, you introduce the credit specialist as you would any subject-matter expert: you are bringing them deeper expertise for a specific engagement, not stepping away from the relationship. The credit conversation and the planning discussion around it stay with you.
Christopher is the Director of Client Relations and Business Development at MYCPE ONE, a leader known for his energy and people-first approach. Chris leads from the front mentoring teams, driving growth, and building lasting client relationships. With over a decade of experience in sales, coaching, and business strategy, he has helped 5,000 CPAs nationwide overcome challenges and discover new opportunities. Chris is a familiar presence at major accounting conferences, representing MYCPE ONE and shaping meaningful industry partnerships. Passionate about leadership and professional growth, he continues to inspire teams and professionals to reach their highest potential.
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