Court Opinion

ID: 9491743
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:22:23.276307+00
Date Added: 2024-06-11T17:54:55.100394
License: Public Domain

MANION, Circuit Judge,
concurring in part and concurring in result.
Although I concur with the court’s opinion and holding, I take issue with the analysis in *449part IIC which addresses the proposed exception to the statutory exclusion. Section 41(d)(4)(E) disallows the qualified research credit for computer software that is developed by or for the taxpayer “primarily for internal use by the taxpayer.” 26 U.S.C. § 41(d)(4)(E). The plain meaning of the statute eliminates the eight projects for which United Stationers seeks the credit because the projects were clearly for internal use. The court expands on this exception by applying a regulation found only in the legislative history to 26 U.S.C. § 41 and proposed regulations; it is not in the statute and it has not been formally adopted by the Treasury Department. In the absence of a law passed by both houses of Congress and signed by the President, or a regulation adopted pursuant thereto, we have no basis on which to conclude that a taxpayer meeting this exception is entitled to a tax credit. While the court’s analysis of this exception correctly concludes that the credit does not apply, it could send the wrong signal both to taxpayers and to the Treasury Department to invoke a regulation not legally in place. Until the regulation is made law, this court’s analysis should be confined to the statute.