The IRS released a new coordinated issue paper. Coordinated issue papers explain how IRS auditors, not IRS appeals officers or attorneys, will treat a particular situation. The issue paper addresses the situation where, with respect to a research tax credit, a taxpayer incurs utility expenses, such as electricity, for buildings in which qualified research activities are performed. The IRS recites the rule that general and administrative expenses do not qualify as research expenses. The IRS notes that extraordinary expenses do qualify as research expenses. The IRS then notes the exception to this rule, which applies to all expenses — not just utility expenses, that extraordinary expenses associated with performing qualified research activities generally do qualify. In this paper the IRS concludes that the utility expenses do not qualify as research expenses because the taxpayer did not demonstrate that the utility expenses were extraordinary; therefore, the utility expenses were non-qualifying general and administrative expenses. The paper can be found on the IRS website.