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petitioner has been prejudiced in terms of its opportunity to
have a fair trial on the merits of the items in controversy.
We find that respondent’s action was timely in the setting
of this case. The parties were preparing for a trial to begin
April 29, 1996. The litigation had proceeded only a few months
into the pretrial schedule and was about 6 months from trial date
when the Court of Appeals’ holding changed the slant of the legal
playing field concerning the funding issue. This Court
informally agreed with the parties that they would be given time
to consider the effect of the Court of Appeals’ holding. In
addition, we were disposed to continue the funding issue from the
scheduled April 29, 1996, starting date. Approximately 1 month
after the Fairchild reversal, respondent announced her concession
of the legal issue and that it would be necessary for petitioner
to tie the amount of the credit to the contract language. At
that point, the parties agreed to proceed to trial on the other
unresolved issue(s) beginning April 29, 1996, and that any trial
concerning the funding issue should be delayed. The Court agreed
to continue the funding issue for a reasonable time to give the
parties an opportunity to evaluate the effects of the concession
and respondent’s position on quantification of the research
credit.
Petitioner refers us to Durkin v. Commissioner, 87 T.C.
1329, 1402-1403 (1986), affd. 872 F.2d 1271 (7th Cir. 1989), for
its contention that this Court’s Rules and Procedures are not to
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