On September 11, 2017, the IRS issued a Directive to Large Business & International (LB&I) Division examiners providing guidance for Internal Revenue Code (IRC) Section 41 examinations (LB&I-04-0917-005). The purpose of the Directive was to provide an efficient manner of determining qualified research expenses (QREs) for LB&I taxpayers that meet the Directive’s eligibility requirements and to more efficiently manage LB&I’s audit resources. On February 1, 2018, the Franchise Tax Board (FTB) announced that California will follow the IRS Directive.