- 81 -
trial" or "a tentative procedure or policy; [especially] one
adopted in uncertainty as to whether it will answer the desired
purpose or bring about the desired result". The court then cited
the legislative history of the test and found that it was necessary
to determine the extent of uncertainty that existed in the
taxpayer's projects. The court concluded that "while the aspired
benefits of the projects were in doubt, the development of the
means that would allow Stationers to potentially achieve those
benefits was not." Id. at 1285.
Despite the court's finding that the taxpayer failed to
satisfy both the discovery and process-of-experimentation tests, it
considered whether the taxpayer could have satisfied any of the
internal use software tests. In doing so, the court rejected the
magistrate judge's findings that the taxpayer did not satisfy the
innovativeness test. Instead, the court noted that the "Magistrate
Judge was correct in reasoning that Stationers' projects `simply
increased efficiency and revenues for Plaintiff'," but nonetheless
concluded that "[the projects] all fall under the plain meaning of
the definition included in the legislative history" and were thus
innovative. Id. at 1287-1288.
The court did, however, agree with the magistrate judge and
find that the taxpayer failed to satisfy the significant economic
risk test because "`the ability to implement [the projects] was
clear from the outset. The only risk or uncertainty was whether
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