I get why the IRS would be interested in companies trying to hide operations inside the favorable tax treatment of R&D, but do you think the opposite is also true? Would the IRS (or SEC) care if a company underreported its R&D spending by choosing to classify new product development as a typical expense?
Point taken. I don’t know if the SEC would care, seems possible, but you’re right, it hadn’t occurred to me anyone would deliberately under report R&D, there probably is latitude in that direction.
