Form 6765 Section G and what it means for R&D documentation

Form 6765 Section G now requires per-business-component reporting for R&D tax credit claims. While optional for tax year 2025, this reporting becomes mandatory for tax year 2026. The shift is significant — and most companies are not ready for it.

What changed

Previously, R&D tax credit claims could be substantiated at a relatively high level. Section G changes that by requiring companies to identify each business component, describe the research activities, and demonstrate qualification under the Four-Part Test — individually, per component. This means documentation that was “good enough” at the aggregate level may be insufficient at the component level.

The documentation gap

Most companies generate R&D tax credits worth millions. Fewer than 20% have documentation that would survive a formal examination at the per-business-component level. The gap isn’t in the R&D activity itself — it’s in the evidence architecture. The work gets done. The documentation doesn’t capture it at the required granularity.

What this means operationally

Companies claiming R&D credits need three things that most don’t have:

• — A governance framework that defines how R&D evidence is collected, organized, and maintained at the business-component level

• — Contemporaneous documentation protocols that capture evidence at the time of the activity — not reconstructed months later for filing

• — Examination readiness architecture that organizes evidence for audit defense before an examination begins

The governance solution

This isn’t a tax problem — it’s a governance problem. The credits are real. The R&D activity qualifies. What’s missing is the evidence architecture that connects activity to documentation to audit defense. That’s a systems design challenge, not a tax advisory engagement.

Archway’s R&D Documentation Governance service line addresses this through a three-layer architecture: governance installation (Layer 1), pre-filing qualitative review (Layer 2), and examination readiness (Layer 3). Each layer can be engaged independently or as a complete program.