IRS is gearing up to take a closer look at returns of companies who claimed the R&D tax credit last year. IRS reviewers found that many of the claims for credits were short of documentation or used invalid assumptions to bolster the claim. As a result, the Service is taking a second look at all of the claims.

Worse: Companies found to have gone awry of the rules will be hit with a 20% penalty on the claimed credit.

Tags: R&D, Tax compliance, Tax credits, Tax filing