Electronic Mechanics, Inc. v. Commissioner

OPINION.

Opper, Judge:

We are met at the threshold by a question said to be of first impression: Whether petitioner, not having existed for 12 months, could possibly avail itself of the relief accorded by section 721 (a) (2) (C) for research and development “extending over a period of more than 12 months.”1 Respondent’s regulations expressly require that the research and development “must be that of the taxpayer.”2 Petitioner attacks the regulation as being arbitrary and invalid. We find it, however, to be firmly buttressed upon the legislative history.3 For that reason if for no other, we view…