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3. The Seven Tests ........................................ 59
A. The Section 174 Test ............................... 60
B. The Discovery Test ................................. 64
C. The Business Component Test ........................ 69
D. The Process of Experimentation Test ................ 70
E. The Innovativeness Test ............................ 74
F. The Significant Economic Risk Test ................. 76
G. The Commercial Availability Test ................... 77
4. Summary of Internal Use Software Requirements Under the
Seven Tests ............................................ 78
5. United Stationers, Inc. v. United States ............... 79
6. The Experts ............................................ 82
A. Petitioner's Expert--Dr. Drew McDermott ............ 83
B. Respondent's Experts ............................... 87
i. Dr. Randall Davis ............................ 87
ii. The Tower Group .............................. 92
7. Analysis of the Eight Sample Activities ................ 97
A. Strategic Banking System ........................... 98
B. Trust TU ........................................... 112
C. Success ............................................ 115
D. General Ledger ..................................... 117
E. Money Transfer ..................................... 118
F. Cyborg Payroll ..................................... 119
G. Trust Payment ...................................... 121
H. Debit Card ......................................... 123
Conclusion .................................................. 125
JACOBS, Judge: By separate notices of deficiency, respondent
determined the following deficiencies in petitioner's Federal
income taxes:
Docket No. Year Deficiency
13908-92 1983 $2,605,571
1984 2,442,134
1985 29,187
1986 19,301,530
20567-93 1987 93,413
1988 3,999,398
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