Friday, May 21, 2010

IRS releases guidance on Therapeutic Discovery Project Credit / Grant

This morning, the IRS released advance guidance on the Therapeutic Discovery Project Credit / Grant.

A few items stand out:
  • Applications must be filed on Form 8942 (and in conformity with the form's instructions) and each project must be applied for separately.
  • That form is expected to be released no later than June 21, and applications must be filed (i.e., postmarked) no later than July 21.
  • The Department of Health & Human Services seems to be the primary determiner of which projects should be funded.
  • There will be a $5 million per-taxpayer limitation on allocations of credits/grants (for 2009 and 2010 together), regardless of the number of projects sponsored.
  • In the first round of allocations, the IRS will approve or deny applications no later than October 29, 2010 and will notify taxpayers by letter.
  • Taxpayers will not have a right to Conference or Appeal related to any matters under the Notice.  i.e., all decisions are final.
  • The 250-employee limit includes both full-time and part-time employees (but not leased employees).
  • Taxpayers are required to inform the IRS of any significant changes in plans that arise prior to the date of IRS certification of the projects.  A significant change is any change (including any change that would affect the continuing accuracy of a statement made in the application) that a reasonable person would conclude might have influenced HHS’ evaluation.
  • Grant applicants must provide a DUNS number with their application.  If the applicant does not already have a DUNS number, it may request one at no cost by calling the dedicated toll-free DUNS Number request line at 1-866-705-5711.
  • Grant applicants must also register with the Central Contractor Registration ("CCR"). To register, go to The registration must be completed before a payment can be made.
  • Approved credit and grant applicants are advised that the IRS will publicly disclose their identities, and the amount of their credit or grant.
  • The statute authorizes public disclosure of more information for taxpayers awarded grants than for those awarded credits (e.g., types of projects).  As a result, the IRS requests authorization to publish such information for approved projects awarded credits.  While such consent is not required to receive a credit allocation, it's not clear whether withholding it could have any impact on a borderline project being approved.
  • Unnecessarily elaborate applications are discouraged and brochures or other presentations are not permitted as part of the applications and will not be considered.

The release read as follows:

Notice 2010-45 establishes the qualifying therapeutic discovery project program under § 48D of the Internal Revenue Code.   Section 9023(a) of the Patient Protection and Affordable Care Act (Act) added § 48D to the Code as part of the investment credit under § 46.  Section 48D provides a nonrefundable tax credit equal to 50 percent of an eligible taxpayer’s qualified investment in a qualifying therapeutic discovery project.  Under section 9023(e) of the Act, an eligible taxpayer may elect to receive a grant in lieu of credits.  Section 48D(d)(1)(B) limits the total amount of credits or grants to be allocated under the program to $1 billion during the two-year period from 2009 through 2010.  The Service, in consultation with Department of Health and Human Services, will award certifications for qualified investments.  The credits or grants will only be available to taxpayers having 250 or fewer full-time and part-time employees.

Notice 2010-45 will appear [in] IRB 2010-23, dated June 7, 2010. 

link to Notice:

No comments:

Post a Comment