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III. Analysis
We note at the outset that petitioners’ reconstruction of
qualifying expenses was unreliable, inaccurate, incomplete, and
wholly insufficient to establish what various workers did and
whether such expenses qualify for the research credit. In
addition, petitioners failed to have their computer expert
address technical issues relevant to the case, and, as noted
below, the testimony of petitioners’ witnesses further supports
our conclusion that work performed by Applied Systems’ employees,
during the years in issue, does not qualify for the research
credit.
A. TAM
Most of the product development of the TAM module occurred
during 1980 through 1989. In describing a “sophisticated
approach” that Applied Systems had “invented” and used in the TAM
module, petitioners’ programmer testified: “This would have been
in the ‘80s.” During the years in issue, employees merely
updated the TAM module. Solutions to problems of rounding
numbers, locking transactions, and expanding representation were
commonly known in the computer science field and did not present
significant programming challenges. Applied Systems’ purchase
and use of third-party software to facilitate managing memory,
multitasking, and indexing tasks indicates that these techniques
were also known in the computer science field. Petitioners’
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