Yelp’s earnings grew sixfold in the third quarter of 2023, partially due to the effect of a one-time tax adjustment related to deductions for research and development, The Wall Street Journal reported.

The company benefited from recent IRS interim guidance that  clarified how certain R&D expenditures would be treated under a provision of the 2017 Tax Cuts and Jobs Act. Under new rules that took effect last year, companies are now required to amortize their domestic R&D costs over five years and their international ones over 15 years. For almost seven decades before the law’s passage, businesses were allowed to deduct certain R&D expenses immediately to reduce their taxable income.

The IRS’s interim guidance allowed Yelp to clear up certain ambiguities in the way research expenses were capitalized, Chief Financial Officer David Schwarzbach told the Journal.

The guidance helped boost Yelp’s profit for the third quarter by 539 percent to $58 million compared with a year earlier. Earnings included $15 million from the one-time tax adjustment because of the IRS guidance.

In February, Schwarzbach told analysts that the company’s effective tax rate for 2023 was expected to rise to a range of 32 percent to 38 percent, up from 18 percent in 2019, with the tax rule being a significant driver behind the increase, the Journal reported. With the aid of the IRS guidance, Yelp now estimates its effective tax rate for 2023 to be between 22 percent and 26 percent. “So that clarification was quite important,” Schwarzbach said.

He added that the tax law is still increasing the cash taxes Yelp pays by tens of millions of dollars, and the company is making estimated payments in light of the change, though it has not disclosed specific amounts. “[The law] does make it more expensive to invest in research and development, which is what you’re doing to remain long-term competitive,” Schwarzbach said.

CFOs have been urging Congress to rescind the law, but Democrats would like to see such a repeal linked to an expanded child tax credit.

Schwarzbach told the Journal that he is somewhat optimistic. Ift Congress avoids a shutdown this month, he said, “we continue to hear that there’s bipartisan support to address this, we continue to hear that this is important to members of Congress.”