How to Prepare Your Team for an IRS R&D Interview or Site Visit

For several years, IRS exam teams effectively refused to conduct interviews or site visits in R&D audits. Engineers insisted on contemporaneous documentation and often dismissed sworn declarations from the very employees who performed the work. That posture is changing.

We are now seeing exam teams engage in SME presentations, ask substantive questions during site visits, and use what they learn to reach more reasonable conclusions.

That shift is good news—but it also means taxpayers need to be ready.

A well‑prepared witness in an IRS interview can do more for your case than any document production. A poorly prepared one can sink a claim that would otherwise have sailed through.

Why Interviews Matter More Than You Think

The IRS Four‑Part Test requires a taxpayer to demonstrate:

• Technical uncertainty
• A process of experimentation
• A technological purpose
• A qualifying business component

Most of that story lives in the heads of your engineers—not in your project management system.

A well‑run interview is often the best way to get that story into the record in a way that actually answers the questions an IRS engineer is trying to resolve. A witness who is prepared to address the IRS’s real concerns will outperform even the most robust document production.

And when interviews are transcribed, they can become powerful evidence at Appeals if the case progresses that far.

Takeaway: Two years ago, the IRS publicly stated that documents should “pave the road” and interviews should only “fill the potholes.” That position has reversed. If your exam team is requesting interviews or site visits, it is usually a sign they are conducting a more reasonable audit. Cooperation—done thoughtfully—now pays dividends.

Don’t Automatically Push Back on Interview Requests

Many tax teams have a reflexive resistance to IRS interviews. That instinct is understandable. Interviews are disruptive, time‑consuming, and risky if witnesses are unprepared.

But automatically refusing or stonewalling interview requests can backfire—especially now that the IRS is attempting to conduct more cooperative examinations.

If the exam team is asking for interviews, they are often trying to understand the work, not ambush the taxpayer. Work with them on timing and scope. Offer a structured presentation format rather than an unstructured Q&A if that helps manage risk. The objective is simple: get helpful, accurate information into the record.

The Prep Process: How to Get Your Witnesses Ready

Witness preparation is both critical and ethical when done correctly.

You cannot script testimony or tell a witness to say something that is not true. What you can do is help them understand what is relevant, how their work fits into the Four‑Part Test, and the types of questions they are likely to face.

A strong preparation process has two phases:

1. Deep‑dive sessions where the witness explains the project in detail so the tax and legal team fully understands what actually happened.
2. Exhaustive dry runs where the witness faces realistic—and difficult—IRS‑style questions.

The benchmark is simple: after the real interview, the witness should say it felt easier than the prep.

Key Rules for Witnesses

• Always tell the truth. This is non‑negotiable and should be stated plainly.
• Listen to the entire question before answering. IRS engineers are not trained questioners and often combine multiple assumptions into a single question. Witnesses should pause, parse the question, and answer only what was actually asked.
• Do not adopt false premises. If an IRS agent asserts something inaccurate (e.g., “we know seven other companies have already solved this problem”), the witness must correct it. Silence can be interpreted as agreement.
• Do not speculate. “I don’t know” or “I don’t remember” is far safer than a guess that could be wrong.
• Avoid harmful shorthand. Words like simple, basic, routine, or easy are red flags in an R&D context. Help witnesses describe their work precisely and in the context of what was known at the time.
• Understand the Four‑Part Test. Witnesses who can naturally connect their work to technical uncertainty, experimentation, and technological purpose are far more effective than those who simply tell a compelling story.

Site Visits: A Powerful Tool if Done Right

Site visits can be even more persuasive than interviews because they allow IRS engineers to see the work in context. Many IRS engineers appreciate them.

But a successful site visit is not a casual walk‑through.

The tour guide is effectively a witness and must be prepared accordingly. The informal environment of a plant or lab is actually a risk—people tend to speak casually in ways they never would in a conference room.

Ground Rules for Site Visits

• Do not allow exam team members to separate from the group or wander the facility independently.
• Decide in advance when and where questions will be allowed—during the tour, at specific stations, or in a post‑tour debrief.
• Map the route carefully. Show the IRS what you want them to see and nothing you have not prepared for.
• Notify employees well in advance of the visit. No one should be caught off guard by auditors in their workspace.
• No direct conversations with workers during the tour. All questions should go through the tour guide.

Statistical Sampling: Where Things Stand

The IRS is no longer actively challenging the taxpayer’s right to use statistical sampling in R&D cases. While there was a period when the Practice Network argued sampling was impermissible, that position has largely faded.

Business‑component‑based samples remain the safer option, but employee‑based samples are again being accepted—provided the taxpayer can clearly connect sampled employees to the projects they worked on.

Any sampling plan should comply with Rev. Proc. 2011‑42, and where an audit is ongoing, taxpayers should push for IRS sign‑off on the plan before execution.

What This Means for Your Documentation Now

Even if you are not currently under audit, the return of interviews and site visits is a signal to revisit your documentation strategy now.

The strongest interviews are those where witnesses are explaining work that already exists in organized, contemporaneous records—not reconstructing history from memory.

If you want to discuss how to build documentation practices that hold up under real IRS scrutiny, our team works directly with tax executives and CFOs on exactly these challenges. Let’s talk through where your exposure sits.

Stephen Whiteaker, CPA

As MASSIE’s Director of Controversy, Stephen specializes in audit risk assessment and quality review. His proficiency in navigating complex tax law makes him an essential resource in addressing tax technical challenges for clients. His exten...