I was referring to the statute, in that you shall capitalize R&D. That's not just the plain language of the statute [1], or how the Congress who passed it interpreted it [2], it's the plain language as the IRS describes it in Pub 535 [3]:

> Research or experimental expenditures paid or incurred in tax years beginning after December 31, 2021, must be charged to a separate specified research or experimental capital account and amortized ratably over a 5-year period ... The expenses cannot be deducted in full in the current year.

> Research or experimental expenditures, as used in section 174, are research and development costs ... you incur in connection with your trade or business [..] The costs related to developing software are treated as research and experimental expenditures.

Nothing contradicts this plain meaning. Rev Proc 2023-11 [5] just reiterates that yes, all software development is included in R&E expenses:

> 2.02 (5) Section 174(c)(3) provides that for purposes of § 174, any amount paid or incurred in connection with the development of any software is treated as a research or experimental expenditure accounted for under the required § 174 method.

And yes, no deduction is allowed:

> 2.02 (1) As amended by § 13206(a) of the TCJA, § 174(a)(1) provides that in the case of a taxpayer’s specified research or experimental expenditures for any taxable year, except as provided in § 174(a)(2), no deduction is allowed for such expenditures.

The sad part is that it's not even that much money. The Joint Committee estimates [4] that it will gain about 12 billion per year on average, but most of that is front-loaded into TY22 and 23. So they force larger companies like Google to hand over their cash so they can collect the float on it or whatever, and they don't care it will fuck over all these startups. They probably modeled it in.

[1] https://www.law.cornell.edu/uscode/text/26/174 [2] https://www.jct.gov/publications/2018/jcs-1-18/ [3] https://www.irs.gov/publications/p535 [4] https://www.jct.gov/publications/2017/jcx-67-17/ [5] https://www.irs.gov/pub/irs-drop/rp-23-11.pdf