Risk Analysis

IRS IRC § 42 Audit Technique Guide — Part I (Introduction and Pre-Contact Analysis) · 2026 edition · updated 2026-07-29 · United States

A reasonable projection of the potential additional tax should be estimated based on all current year adjustments, recapture of credit from prior years, and future year revenue protection. Any examination adjustments that propose to decrease the applicable fraction or eligible basis will result in changes not only to the taxable year under audit, but also in the recapture of a portion of the credit allowable in prior years and will possibly limit the amount of allowable credit in the remaining years of the credit period. A single potential adjustment can significantly impact the allowable credit when projected over the entire 10-year credit period.

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▸Contents — IRS IRC § 42 Audit Technique Guide — Part I (Introduction and Pre-Contact Analysis)

IRS IRC § 42 Audit Technique Guide — Part I (Introduction and Pre-Contact Analysis)

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