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credit. We disagree. Data conversion is commonly provided by
software vendors. There was no technical uncertainty, for
example, that a COBOL program could be rewritten in C, and, by
1990, the principles for converting software from DOS to Windows
had been published. Petitioners’ programmer testified that,
during the years in issue, Applied Systems did not fundamentally
convert the TAM module from DOS, but, as “a simple plan we could
do fast”, merely put the TAM module in a Windows format, so “we
could start demonstrating something under Windows more quickly”.
Applied Systems’ vice president testified, relating to Diamond,
that employees were “trying to figure out what the product was
supposed to do”, but “weren’t doing any coding” (i.e.,
programming), during the years in issue. Petitioners presented
insufficient evidence relating to evaluations/R&D and failed to
address this issue on brief.
IV. Conclusion
Petitioners fell woefully short of presenting sufficient
evidence to establish, as required by section 41, that Applied
Systems’ activities met the requirements for the research credit.
Applied Systems did not undertake research to discover
information beyond the current state of knowledge in the computer
science field. Nor did Applied Systems conduct a process of
experimentation aimed at eliminating uncertainty about the
technical ability to develop the software.
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