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discovery required by the taxpayer, noting the legislative history
of section 41. On the other hand, petitioner contends that "expand
or refine" is only illustrative and is intended to contrast the
mere use of a computer which in and of itself does not necessarily
involve fundamental reliance on the principles of computer science.
We believe the purpose of the first sentence of note 3
("Research does not rely on the principles of computer science
merely because a computer is employed.") is to emphasize that
Congress intended the R&E credit not for the use of the hard
sciences per se, but for the use of the principles of the hard
sciences in conducting research. "Principle" is defined as "a
comprehensive and fundamental law, doctrine, or assumption".
Webster's Ninth New Collegiate Dictionary (1985). Clearly, the use
of a computer does not necessarily require reliance on any
fundamental laws, doctrines, or assumptions.
The purpose of the second sentence of note 3 ("Research may be
treated as undertaken to discover information that is technological
in nature, however, if the research is intended to expand or refine
existing principles of computer science.") is to indicate that the
taxpayer must discover information with respect to the principles
of the hard sciences on which it fundamentally relies. Note 3 sets
forth two means of discovering information about the principles of
the hard sciences--either by "expanding", or by "refining"--either
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