Case: Research Credit Tests Not Proven (T.C. Memo) (IRC §41)

Taxpayer failed to prove that expenses of projects to improve their business of milling and selling wheat flower are qualified research expenses under tax code Section 41, the U.S. Tax Court held in a memorandum opinion. Taxpayer did not establish that it satisfied either the process of experimentation test, the uncertainty test, the technological information test, or the business component test with regards to its various projects. However, the court did find that Taxpayer acted with reasonable cause and in good faith when it relied on it’s accounting firm in its preparation of Taxpayer’s returns and credit studies ...