Can my company’s chances of audit increase by claiming R&D Tax Credits?

This is a common misconception among small and medium businesses. Taking the R&D Tax Credit on a timely-filed return, including extension, does not increase your company’s audit risk. According to the IRS, only 0.9% of corporate tax returns and 0.2% of small businesses (S corps and partnerships) are randomly selected for audit. 

According to IRS guidelines, a return can be selected for audit based on a myriad of reasons. There is no directive that specifically targets companies who claimed R&D Tax Credits.