The IRS, in Legal Advice Issued by a Field Attorney (LAFA) 20131102F, recently concluded that severance payments were not eligible to be included in a company’s research tax credit calculation. This conclusion is contrary to an earlier field service advice issued by the IRS. LAFA 20131102F is not binding precedent, but it may indicate the IRS’ position during examinations. Accordingly, companies which have made, or will make, severance payments to employees whose regular wages are included in the calculation of the research tax credit should consider the IRS’ analysis in LAFA 20131102F when determining whether to include the severance payments in their research tax credit calculations.