You Have 17 Days to Find Money Your Clients Left on the Table

You Have 17 Days to Find Money Your Clients Left on the Table

There is a tax advisory window open right now that most of your clients don't know about. It closes permanently on July 6, 2026.

The One Big Beautiful Budget Act (OBBBA) reversed one of the most consequential changes from the 2017 Tax Cuts and Jobs Act: the requirement that businesses capitalize and amortize domestic research and development costs over 5 years rather than deducting them immediately.

For tax years 2022, 2023, and 2024, that change cost many businesses significant cash — they had to spread out deductions that should have come off the bottom line immediately.

The OBBBA reversal allows businesses to go back and claim those deductions retroactively via amended returns. Revenue Procedure 2025-28 created a specific process for this. July 6, 2026 is the deadline. After that date, the window closes permanently for 2022, 2023, and 2024.

For an accounting or CPA firm with clients in software development, manufacturing, engineering, biotech, or any industry where companies invest in improving products, processes, or internal tools: you have a 17-day window to screen your client list and recover money your clients didn't know they left on the table.

What Changed and Why It Matters

Under the 2017 TCJA, domestic R&D expenditures had to be capitalized and amortized over 5 years rather than deducted in the year they were incurred. Foreign R&D costs faced a 15-year amortization period. This was a significant departure from decades of prior law that allowed immediate deduction.

The impact was real and immediate: businesses that had historically written off R&D costs in year one found themselves carrying them across multiple returns, reducing the current-year tax benefit substantially.

The OBBBA reversed this. Businesses can now claim 100% immediate expensing of domestic R&D costs — and they can do so retroactively for 2022, 2023, and 2024 by filing amended returns.

The eligibility threshold: the Section 280C election that facilitates this retroactive treatment is available to businesses with $31 million or less in average annual gross receipts across 2022, 2023, and 2024. For most clients of independent CPA and accounting firms, that covers the majority of the roster.

The Three-Question Client Screen

You don't have time to review every client file in detail. The goal of the first pass is to identify which clients are worth pulling original returns for.

Question 1: Did this client incur costs to develop, test, or improve a product, process, software, or internal tool in 2022, 2023, or 2024?

This covers more ground than most CPAs initially assume. It's not limited to clients in classic R&D industries:

• A software company building a new product feature: yes
• A manufacturer improving a production process: yes
• A professional services firm that built proprietary internal software: yes
• A restaurant chain developing a new proprietary recipe or food processing technique: potentially yes
• An e-commerce business developing a new fulfillment algorithm: yes

If any client spent money on developing or improving something — whether for external sale or internal use — they are worth a second look.

Question 2: Were those costs domestic (U.S.-based activities)?

The retroactive immediate expensing applies to domestic R&D costs. Foreign R&D activity still faces different amortization rules. For most small-to-midsize business clients, domestic activities are the norm.

Question 3: On the original 2022, 2023, and/or 2024 returns, were those costs capitalized and amortized rather than deducted immediately?

If your firm prepared the original returns under post-TCJA rules, and the client had R&D costs, the answer is almost certainly yes. Those costs were spread across 5 years. That's the amount that can be retroactively expensed now via amended return.

Any client who answers yes to all three questions is a candidate.

How to Work Through Your Client List

For most CPA firms, the fastest path is to filter by industry code first, then pull original returns for high-probability clients.

Step 1: Filter by industry. NAICS codes that commonly indicate R&D activity:

• 5112x (software publishers)
• 3xxx (manufacturing — any subsector)
• 5415x (computer systems design and services)
• 5417x (scientific research and development services)
• 3111-3999 (food/beverage manufacturing, industrial manufacturing)
• 5613x (employment services with technology development)

Your practice management platform (Karbon, Canopy, TaxDome, Firm360) can filter client records by industry code. Pull that list first.

Step 2: Send a quick qualifier to your filtered list. One email, one question: "Did your company incur any costs for developing or improving a product, software, process, or internal tool in 2022, 2023, or 2024? We're reviewing whether you may qualify for a refund under the OBBBA Section 174 changes."

You can draft this in two minutes with Claude or any AI drafting tool. Send to the filtered list today.

Step 3: For respondents who confirm R&D activity: Pull the original returns, identify the capitalized R&D costs on the 2022, 2023, and 2024 filings, and quantify the potential immediate deduction.

Step 4: File amended returns before July 6. Form 1040-X for individuals, Form 1120-X for corporations.

What a $31M Client Looks Like in Practice

Consider a client that runs a software development company — 25 employees, $4M in annual revenue, $200,000 in payroll attributed to new product development in 2022.

Under TCJA rules, that $200,000 was spread over 5 years: $40,000 per year. The 2022 return showed a $40,000 deduction where a $200,000 deduction could have been taken.

The difference: $160,000 in additional deductions available retroactively. At a 25% effective tax rate, that's a $40,000 refund from the 2022 return alone — before including 2023 and 2024.

For a three-year window with $200K in annual R&D costs: the total retroactive deduction recovery could reach $400,000 in deductions not yet claimed, with a potential refund in the range of $100,000.

That is a meaningful amount of money to a 25-person software company. And it's money that is gone after July 6 if no one tells them.

The Advisory Angle This Creates

Beyond the immediate deadline, this situation creates a structural advisory conversation with clients who have ongoing R&D activity.

The OBBBA has restored immediate expensing going forward — not just retroactively. Clients who were capitalizing R&D costs under post-TCJA rules now need their returns structured to reflect the restored deduction in real time, not over 5 years.

For a CPA firm that proactively screens client lists and recovers the retroactive benefit: this is a concrete demonstration of advisory value. You found money they didn't know they had. That's the kind of moment that justifies a subscription pricing model and makes clients stay for the 90% lifetime retention rate Ron Baker cited at SNH this year.

The AI-Assisted Screening Shortcut

If your firm has 100+ clients and 17 days, the math on manual review is tight.

The fastest approach: use your practice management platform to export a client list with industry codes, then use Claude (or your firm's AI tool) to draft personalized outreach messages for the top 30-50 names on the list.

Prompt framework:

"I have a list of clients in [manufacturing/software/engineering]. I need to email each of them about a one-time tax refund opportunity that closes July 6. The opportunity: they may be eligible to amend their 2022-2024 returns to claim immediate deductions for R&D costs instead of the 5-year amortization required under prior law. Draft a 3-paragraph email that explains what we need to know from them (what R&D activity they had), creates urgency (July 6 deadline), and asks them to reply or schedule a call."

This approach turns a 3-day outreach project into a 3-hour one. And every response that confirms R&D activity is a concrete revenue opportunity for the firm before July 6.

The Deadline Is Real

July 6 is not an estimated date. Revenue Procedure 2025-28 established it specifically. After that date, the option to amend 2022-2024 returns under the OBBBA Section 174 reversal is gone.

This is not a planning opportunity you can revisit at year-end. It's not something clients can do themselves with a tax preparation app.

It's a 17-day window that closes permanently. The clients who benefit are the ones whose CPAs found this first.