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research credits claimed under section 411 in connection with
fixed-price Government contracts. For the reasons expressed
hereinafter, petitioner’s motion will be denied.
Background
This case was specially assigned to this division of the
Court by an April 4, 1995, order. The parties were placed under
a pretrial schedule, and trial was set to begin April 29, 1996.
One of the issues involved whether petitioner was entitled to
research credits in connection with fixed-price Government
contracts. Although petitioner had claimed other research
credits on its original returns for the years in controversy, no
research credits had originally been claimed with respect to
fixed-price Government contracts.
The credits claimed on petitioner’s original returns were
examined by respondent’s engineer. During 1991, the engineer
issued a report concerning the credits claimed on the original
returns. Respondent mailed a notice of deficiency during 1994
1 Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the periods under
consideration. The taxable years in this case are 1985 and 1986.
Sec. 41 was added in the Tax Reform Act of 1986, Pub. L. 99-514,
sec. 231(d)(2), 100 Stat. 2085, 2178, as a successor to sec. 30.
Sec. 30 was added by the Tax Reform Act of 1984, Pub. L.98-369,
secs. 471(c), 471(i)(1), 98 Stat. 494, 826, 831, as a successor
to sec. 44F. The research tax credit was established as sec. 44F
in the Economic Recovery Tax Act of 1981, Pub. L. 97-34, sec.
221(a), 95 Stat. 172, 241. Rule references are to this Court’s
Rules of Practice and Procedure.
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