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litigating the amount of the increased credit, and alternatively,
(2) if respondent is not precluded from reauditing and/or
litigating the amount of the increased credit, the Court should
exercise its discretion under Rule 142 to shift the burden of
proving any decrease in the amount of the credit to respondent
because respondent’s engineer had agreed to a number in her 1994
report.
Discussion
(1) Is respondent bound by the findings in the engineer’s
report?
Initially, we agree with respondent that no binding
agreement regarding the amount of the increased claims exists
between the parties in this case. The reversal in Fairchild was
the catalyst for the parties’ current disagreement. Respondent’s
engineer likely considered the Government’s pending litigation in
the Court of Federal Claims in the Fairchild case when writing
the report concerning the amount of the research expenses and,
hence, the credit. Respondent’s counsel was aware of the
favorable legal precedent when they advised the Court that the
3(...continued)
of reauditing the amount of the credit in this Court. The
question is more correctly centered on the issue of whether
respondent is bound or estopped from questioning the amount of
the credit petitioner claimed in its petition. This matter does
not involve a question of whether a second examination was or
should be conducted within the meaning of sec. 7605(b).
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