[VohuMana]

Maybe unpopular but I assume this is just what is going to happen. I remember awhile back when I was visiting Ireland one of the tours mentioned that modern whiskey and beer in Ireland came about because of taxes. I wish I could remember more details but the story went along the lines of each time a new tax on some type of alcohol happened the producers would reclassify their beverage or change the method which produced it to avoid the new taxes.

I assume this will be the same in the US, software R&D is now some other title with less taxes. When the small companies do it the IRS isn’t going to care but then big ones will do it and the tax law cat and mouse game will continue.

[kevindamm]

The difficulty with this is that §174 counts "all such costs incident to the development or improvement of a product." This makes it hard for you to reclassify the researcher role as any kind of software development role because software development is still R&D. The fact that it includes payments to third parties for R&D also means you can't even just split your software dev house into a nonprofit or something. What can you do? Claim prompting an LLM is not software development even if it produces code? It's just search then, right?