Section 174, as amended by the Tax Cuts and Jobs Act (Pub. L. 115-97) requires taxpayers to amortize specified research or experimental expenditures ratably over a 5-year period (or a 15-year period in the case of specified research and experimental expenditures that are attributable to foreign research), beginning with the midpoint of the taxable year in which the specified research or experimental expenditures are paid or incurred. Further, any amount paid or incurred in connection with the development of any software is treated as a research or experimental expenditure.

The Treasury Department and the IRS have issued various pieces of sub-regulatory guidance under section 174 and related methods of accounting. The public has submitted more than 600 written comments.  However, several hundred of those written comments addressed the impact of the statutory changes enacted by the Tax Cuts and Jobs Act, rather than the proposed guidance to implement the revised statute.  Representatives from the Treasury Department and the IRS have met with stakeholders on aspects of the anticipated proposed regulations.