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IRS Announces One-Month Application Period for Qualifying Therapeutic Discovery Project Tax Credit

May 28, 2010

Authors: Alan E. Lieberman, Louis B. Schatz, Raymond J. Casella

As part of the Patient Protection and Affordable Care Act of 2010, a Qualifying Therapeutic Discovery Project Program (the “Program”) was established pursuant to Section 48D of the Internal Revenue Code (the “Code”). The Program allows a qualifying taxpayer to obtain tax credits and/or grants for fifty percent (50%) of the taxpayer’s qualified investments in qualifying therapeutic discovery projects made during the taxpayer’s 2009 and 2010 taxable years, as certified by the Internal Revenue Service (“IRS”). On May 21, 2010, the IRS issued Notice 2010-45 [http://www.irs.gov/pub/irs-drop/n-10-45.pdf], advising taxpayers regarding the rules and procedures that will govern the Program and, most importantly, notifying taxpayers that they will have only until July 21, 2010 to submit an application for the necessary certification from the IRS. Although the application for certification has not yet been published, this Alert summarizes certain highlights of the Program and the certification requirements so that interested clients can begin to assemble the information necessary to timely file a complete and compelling application.

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