United States v. McFerrin, et ux., 570 F.3d 672 (5th Cir. 2009)

(district court applied incorrect definition for determining what research qualified for the I.R.C. Sec. 41 credit; Treas. Reg. Sec. 1.41-4 does not require qualifying research to go beyond the current state of knowledge in the field; appellate court applied the rule established in Cohan v. Commissionerand found that the taxpayer shouldn't be penalized for not keeping records of hours worked on a research project and that the court should instead rely on testimony to determine a fair estimate of what amount of credit is allowable; appellate court's opinion is consistent with Tax Court's opinion in Union Carbide Corp., et al. v. Comr., T.C. Memo. 2009-50 in which the taxpayer was allowed to use estimates to determine its qualified expenses for the I.R.C. Sec. 41 credit).