The business establishment has lined up solidly in support of a Senate bill that would allow companies to charge the cost of all research and development performed in the United States against their U.S. income.

An Internal Revenue Service regulation adopted in 1977 requires allocation of some domestic R&D costs to foreign-source income. Business executives say this rule penalizes corporations for performing research in the United States and encourages them to move such operations abroad, because many foreign countries do not allow tax credits for research work done in the United States.

The 1981 tax act suspended the IRS rules for two years and ordered the Treasury Department to study their impact. In a report submitted to Congress recently, Treasury acknowledged that the rules had some detrimental effect on American research and supported a two-year extension of the moratorium.

But business representatives strongly supported a bill sponsored by Sen. Malcolm Wallop (R-Wyo.) to lift the rules permanently.

According to the Treasury report, if the rules had been in effect during 1982, "U.S. tax liabilities of U.S. firms would have been $100 million to $240 million higher. Since privately funded R&D performed in the U.S. was about $37 billion in 1982, this estimated increase in U.S. tax liabilities would have increased the cost of domestic R&D . . . by less than 1 percent."

John E. Chapoton, assistant Treasury secretary for tax policy, told the Senate Finance Committee that cutbacks in research spending "may adversely affect the competitive position of the United States," and he endorsed his department's recommendation that the moratorium be extended while Treasury and Congress study a permanent solution.

He stopped short of endorsing the Wallop bill because, as the Treasury report put it, "not requiring any allocation of R&D expense to foreign income probably overstates foreign-source income and may permit foreign taxes to reduce U.S. taxes on domestic income."

But an extension of the moratorium is not enough for Wallop or for the business community, including the U.S. Chamber of Commerce and the National Association of Manufacturers. "Two-year fixes are not particularly helpful for the purpose of making long-term business decisions," Wallop said.

The Wallop bill is expected to clear the Finance Committee with little trouble. A similar bill has been introduced in the House by Rep. Cecil Heftel (D-Hawaii), but no action has been taken.