Opinion
11019-19
11-17-2023
INTERMOUNTAIN ELECTRONICS, INC., Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
RONALD L. BUCH JUDGE.
Pending before the Court are the Commissioner's Motion to Compel Responses to Interrogatories and Motion to Compel Production of Documents, both filed October 20, 2023. Petitioner, Intermountain Electronics, Inc., filed responses. On November 15, 2023, the Court heard argument on the pending motions. Before turning to the pending dispute, we commend the parties for having worked cooperatively through discovery issues, including working to resolve the pending dispute.
The core of the parties' discovery dispute is the proper scope of discovery, more specifically, the use of sampling. This case involves the Commissioner's disallowance of claimed research credits. Intermountain claimed credits based on a sampling of a large number of projects. Intermountain provided the Commissioner with access to the information it used both to determine its sample plus more detailed information as to those items that were sampled. Understandably, the Commissioner wants more. But discovery must be proportional to the needs of the case, and for reasons stated more fully on the record, the Court finds that the discovery the Commissioner seeks is not proportional.
We will provide the Commissioner an opportunity to file a response to this order in which he can propose a discovery approach that is proportional to the needs of the case while permitting him to test the accuracy of Intermountain's sample. This might be achieved by proposing to narrower scope of his existing requests to the sample used by Intermountain or proposing an alternative sample. To that end, it is
ORDERED that the Commissioner shall file a response to this Order by November 22, 2023.