Holding down two jobs
A few months ago, my window washer came for his semi-annual visit. While he was there, he asked me if I owned my own business and if I had employees. When I said yes, he handed me a business card and said, "Let's get together and talk because you can claim the research and development credit, and I can help you get money back from your prior-year tax returns."
I explained that we didn't do research and development to which he replied, "All companies that have employees are doing research every day and are eligible for this credit." I was flabbergasted, and when I went to his website I saw all kinds of outrageous claims, as well as the assurance that any audit that might possibly happen would be handled by them at no extra charge. He was very convincing, and of course, like your hairdresser or your barber, your window washer is a good source of tax and financial advice.
I recalled this exchange when I read IR 2021-45 from the IRS. They are auditing businesses that filed amended returns to claim the IRC §199 domestic production activities deduction that expired in 2017. I wonder if my window washer sells that tax benefit as well. I think he would say that if you have a business in the U.S. and you are busy, you have domestic activities, right?
There are many legitimate companies that are experts and provide valuable and legal analyses to help businesses claim this and other complex credits. But there are some who are not, and these are who the IRS is warning about in IR 2021-45.