IDR guide
How to Respond to R&D Tax Credit IDRs
A practical workflow for responding to IRS IDRs in Section 41 research credit examinations, covering intake, evidence gathering, drafting, and quality control.
Updated August 2026
Step 1: Intake and Scope
Review the IDR carefully and identify each individual request. Separate document production from narrative explanations. Determine whether the request covers a specific project, tax year, or the entire research credit claim.
Assign an owner for technical content and an owner for cost support. Schedule a brief alignment meeting to ensure terminology and supporting information remain consistent.
Step 2: Organize Supporting Exhibits
Create a folder structure organized by IDR number and exhibit. Use consistent exhibit labels (e.g., IDR-03-Ex-A). Prioritize contemporaneous records, including tickets, lab notes, design reviews, timesheets, general ledger detail, and contracts.
Avoid providing unstructured email archives or excessive documentation without organization. Clear indexing and organization help examiners review supporting documentation efficiently and may reduce follow-up questions.
Step 3: Draft the Narrative
Address each request directly and provide the information requested. Where applicable, map each project to the four-part test: permitted purpose, technological in nature, elimination of uncertainty, and process of experimentation.
Cross-check employee names, project titles, and tax years against prior IDR responses and the supporting documentation for filed Form 6765 to ensure consistency across submissions.
Step 4: Quality Control Before Submission
Have a second reviewer check for internal consistency, missing exhibits, and unintentionally broad statements or admissions. Confirm the appropriate privilege strategy with counsel where applicable.
Submit the response by the required deadline with a concise cover letter listing the exhibits and identifying any remaining items with an agreed follow-up date.
Get IDR Response Support
A consultation can help you understand outstanding information requests, assess your current position, and determine whether to prepare for an upcoming review or respond to an active examination.