- 80 - 97-1 USTC par. 50,457 (N.D. Ill. 1997) (report and recommendation of magistrate judge), although the court did not accept all of the magistrate judge's findings. The Government therein, as in this case, conceded that the taxpayer satisfied the section 174 test. In analyzing section 41, the District Court disallowed the credit on several grounds. First, the court concluded that the taxpayer did not discover information that was technological in nature. Applying a dictionary definition for technological ("resulting from improvement in technical processes that increases the productivity of machines and eliminates manual operations or the operations done by older machines") and discovery ("to make known" or "to obtain for the first time sight or knowledge of"), the court found that the taxpayer did no more than use the software package as a building block and that it failed to discover information that was technological in nature. In that regard, the court found that the taxpayer did not expand or refine existing principles of computer science, stating: "Rather, Stationers merely applied, modified, and at most, built upon, pre-existing, technological information already supplied to it. This is a far- cry from what Congress contemplated when it spoke of research directed at the `principles of computer science'." 982 F. Supp. at 1284. The court next considered the process-of-experimentation test. The court defined experimentation as "the act, process, or practice of making experiments" and defined an experiment as "a test orPage: Previous 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 Next
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