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be used by respondent to conduct an audit. In that case, the
Commissioner had issued notices of deficiency with “little, if
any, prior investigation”, and respondent’s attorney had
attempted, through discovery and subpoenas, to conduct the
investigation ordinarily carried on by respondent’s agents. Id.
at 1402. Reflecting upon that situation, we stated that “The
processes of this Court are simply not designed to be used to
conduct a thorough investigation of a complex tax case.” Id. at
1403.
Respondent counters that Durkin v. Commissioner, supra, is
not applicable here because the increased credits were not
addressed in the notice of deficiency but, instead, were placed
in controversy by petitioner’s allegations in its initial
pleading (petition). Respondent points out that, in her answer,
she denied petitioner’s claim for the increased credits, and that
it remains petitioner’s obligation and burden to show entitlement
to research credits in connection with the fixed-price Government
contracts. We agree with respondent. Based on the foregoing, we
hold that respondent is not bound by the agreement in her
engineer’s report.
(2) Should the burden of proof be shifted to respondent with
respect to the amount of the research credit on fixed-price
Government contracts?
Because we have held that respondent may question the amount
of the credit, we must address petitioner’s alternative request
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