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T.C. 903 (1991). Additionally, the test is intended to limit the
form of discovery to the "process of experimentation", which is
defined elsewhere by the conference report accompanying the TRA
1986 and which is discussed infra.
Congress did not statutorily define the word "discovery".
Petitioner asserts on brief that "discovery" has the same meaning
as in the regulations under section 174, see sec. 1.174-2(a)(1),
Income Tax Regs., directing the Court to the structure of section
41(d)(1)(B). Consequently, petitioner contends, if Norwest's
activities satisfy the section 174 test, there is no need to
address whether Norwest performed discovery in the context of the
second test.
Respondent contends that the discovery tests under sections
174 and 41 are different. For several reasons, we agree. First,
the discovery test under the section 174 regulations was not
adopted until 1994, 8 years after the discovery test in section 41
was created in the TRA 1986--thus, we find it difficult to conclude
that Congress intended the tests to have the same meaning. Second,
the discovery test under the section 174 regulations relates to
"uncertainty concerning the development or improvement of a
product". The discovery test under section 41, on the other hand,
relates to information which is "technological in nature" and which
"fundamentally relies on principles of the [hard sciences]". Thus,
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