United Fibertech, Ltd. Kevin T. Twohy, Tax Matters Partner v. Commissioner of Internal Revenue Service

United Fibertech, Ltd. appeals the tax court’s order denying it a tax deduction under 26 U.S.C. § 174(a)(1) (1988). We affirm.

The facts are fully developed in the tax court’s opinion reported at United Fibertech, Ltd. v. Commissioner, 62 T.C.M. (CCH) 699 (1991), and we do not repeat them here. Fibertech contends it is entitled to a tax deduction under section 174(a)(1) for research and experimental expenditures paid in connection with a trade or business. The tax court found that Fi-bertech paid another company to conduct research and that Fibertech never intended directly to manufacture or…