Sec. 174A(c) election via amended return under Reg. 301.9100-2(b) — original return filed with no Schedule C
Fact pattern — individual taxpayer, calendar year 2025:
• Sole proprietor developing a patented consumer product. Pre-revenue, no gross receipts.
• Domestic R&E expenditures in 2025 (patent prosecution fees, outside CAD/design work, prototype fabrication).
• The 2025 Form 1040 was timely filed by 4/15/26. No extension. The activity was not reported at all — no Schedule C, no deduction claimed.
• Taxpayer now wants to elect under §174A(c) to capitalize and amortize rather than take the §174A(a) current deduction.
1. Is Reg. §301.9100-2(b) relief available on these facts? The return was timely filed, but the trade or business was never reported on it. Does "timely filed its return for the year the election should have been made" carry, or does omitting the activity itself create a problem? Plan is a 1040-X adding Schedule C plus the election statement per Rev. Proc. 2025-28 §6.02, with "Filed pursuant to §301.9100-2" on the filing.
2. Is §174A(c) a statutory election? §174A(c)(2) fixes the deadline in the statute, which would put it outside §301.9100-3 discretionary relief. Looking for a sanity check before treating 10/15/26 as a hard stop with no fallback.
3. Does the election bind later years? Rev. Proc. 2025-28 §6.02 says the elected method and period "must be adhered to… for all subsequent taxable years unless the applicant obtains the consent of the Commissioner," while §174A(c)(2) says the election "may be made for any taxable year." Reading those together — can a taxpayer capitalize 2025 and take the §174A(a) deduction for 2026, or is that a §446 method change requiring the automatic procedures at Rev. Proc. 2025-23 §7.02 as modified?
