Publication:
Why R&D Should Be Allocated To Subpart F and GILTI

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2020-06-23

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Tax Analysts
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Stephen E. Shay, Reuven S. Avi-Yonah, Patrick Driessen, J. Clifton Fleming Jr. & Robert J. Peroni, Why R&D Should Be Allocated To Subpart F and GILTI, 167 Tax Notes Fed. 2081 (2020).

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Abstract

In this article, the authors critically appraise the government’s proposal not to allocate research and development deductions to subpart F inclusions and global intangible low-taxed income for foreign tax credit limitation purposes. They say the proposal is an unprecedented interpretation of the statute unsupported by any relevant legislative history that would radically change an R&D allocation method in place since 1977. They argue that the justifications provided in the proposed regulations’ preamble do not stand up to scrutiny.

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